[Raised $72million] Ep.127 - The First 100 with Matt Watson, the founder and CEO of Origin

Matt Watson is the founder and CEO of Origin, a comprehensive employee financial wellness platform. Its integrated solution helps employees simultaneously manage compensation, benefits, and personal finances with financial professionals. Origin is the first platform that combines human financial planners with cutting-edge financial technology that educates employees and allows them to create, execute, and track their personalized financial plans. Origin has now raised $72 million since its inception and is backed by leading VC firms and investors like 01A, Founders Fund, Felicis Ventures, General Catalyst and Lachy Groom.

Where to find Matt Watson:

• Website: Origin - Let's Talk Money (useorigin.com)
• LinkedIn (1) Matt Watson | LinkedIn

Where to find Hadi Radwan:

• Newsletter: Principles Friday | Hadi Radwan | Substack
• LinkedIn: Hadi Radwan | LinkedIn

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Transcript

Let's do it. Broadcasting from around the world. You're listening to the first 100. A podcast on how founders acquired their first 100 paying customers. Here's your host, Hadi Rodwan. Matt, good to have you on the show. How are you doing today? I'm good, getting ready for Thanksgiving. Thanks for having me on. Amazing, Matt. This is a great time to catch up with you. It's been a while since we connected. Let me just start with a quick introduction for our listeners. Matt Watson is the founder and CEO of Origin, which is a comprehensive employee financial wellness platform that allows employees to manage compensation benefits, personal finances, all in a single place. And more importantly, You're not doing it with a bot, you're doing with a human professional. And Matt, you can elaborate more on that during our podcast, but more importantly, you also raised 72 million to bring your mission to a wide audience in the US, backed by big VCs like General Catalyst and Phelous's Ventures. Matt, before we dive into your story, did young Matt ever exhibit any signs of entrepreneurship while you were growing up? Yeah, I did. I mean, my first jobs were jobs that I created on my own. So actually, funny enough, the first one was actually a lawn maintenance and snow removal company. So when I was 13, 14 years old, I would get out there and just go knock on my neighbor's doors and say, Hey, can I take care of the leaves in the yard? Can I remove the snow in the driveway? That was the first taste of it. And it was one of those things where at the time, I think that minimum wage was something like, it's like seven or $8. And I was like, man, I can make so much more money if I just go, you know, knock on people's doors and I'll do these jobs for them. That led naturally into actually like my first kind of real job where I built up a swimming program. I grew up swimming. I swim in college and I saw a big opportunity to actually teach adults how to swim. There's tons of adults who want to learn how to swim, get more comfortable in the water. And that was the first like real business that I ran. And that was how I made most of my money getting through college. It's a Working and building products was something that was always really exciting to me and kind of took maybe a less conventional path early in life. And then, you know, I was really fortunate to be a part of Silicon Valley over the last 10 years and build businesses professionally. Amazing. I mean, before we started recording, we were talking about parenting because we are both new parents. And I would be very interested to know, do you think like when someone is growing up, there's principles and values that... Your family teaches you to become an entrepreneur or do you think that's born? Because for your case, you said you started a snow shoveling business. What sort of principle or guidelines did you have to go out and say, Hey, I have the innate feeling to go and start a business or instead of that, I'm going to go and do sports or play with my friends. Yeah, that's a good question. I mean, I think definitely, I think you learn by example in life, or at least I do, I see people do things and it's interesting to me and I want to learn more about that. Both of my parents are entrepreneurs. They both have their own businesses that they run. So that was what I grew up seeing and learning about. And I think that from a very young age, my dad in particular really instilled that concept of being an entrepreneur, starting a business and encouraging me to go and explore these opportunities. He is in a much more traditional industry. He has a law firm that he runs, but the principles of business are all the same. Build something that's really helpful. provide a service that's really helpful. And I think that those were things that were introduced to me at a really young age. And I think, you know, one thing that I wish was more common in the world was that people did go and explore what that would be like to start their own endeavors and put themselves out there a little bit. And I think if you're introduced to those concepts a little bit earlier in life, you understand that people are receptive to them. They want to help. They want to learn more about what you offer. And Breaking that door down younger, I think is a great thing to do and has probably influenced me quite a bit in my career. Amazing, thank you for sharing that. I mean, you have an interesting story because you started your career in the corporate world, I think in Citigroup doing high yield credit trading desk. And then a few years later, you co-founded your first company, which is in the insurance space that was acquired. And then you started Origin. So walk us through that early sort process and- What inspired you after that to start Origin? Yeah. So where I grew up, the startup scene, technology investing, building software companies was not kind of a part of the national career path. So when I went through college, it wasn't even on my radar, like this idea that you could go to Silicon Valley and now Silicon Valley, I think is more of a concept than a physical occasion after the past couple of years, but as I got into my career, I was obviously in markets and learning more about businesses and how they ran and finance themselves. And. the concept and the place of Silicon Valley just kept resurfacing to me. And as I learned more about that, I was like, this is unbelievable. The stuff that's really interesting to me, I can do on my own if I'm willing to make this move and invest in myself and really learn about an industry and get passionate about it and ultimately start a business. And so that was kind of my journey, you know, started as you mentioned in a traditional corporate role and ultimately, you know, found the courage to say, you know what, I think I can go out and take a swing and bet on myself. And so I left my job in New York. moved out to San Francisco and I thought it would be a little bit easier than it ended up being. It's tough. But yeah, I spent about a year trying to get my first company off the ground. It was looking at a number of different things in financial services, which is where I've been most comfortable and where my entire career has been. And at that time, building in the insurance component of the broader financial services industry was a really topical thing. And so we took a dive there. We built a really great software business that... empowered the existing commercial insurance channel and were really fortunate to have that business acquired. After that business was acquired, it was still excited about building and operating the financial services space. We looked at a number of different things. And I think figuring out what to work on is oftentimes one of the biggest blockers to getting going. And I learned a lot in that period of trying to figure out what to build next. I think for a while, I was really looking at solutions that were trying to find. problems and I think that that's a thing that people really fall into quite a bit is saying what could we build? What I learned over my time and trying to figure out what to build was it's just so critical to take it from the exact opposite way and that ultimately led me to what we're doing at Origin and what I you know realized was that you know where I started my career working on Wall Street it's this industry that's massive and it provides amazing services obviously to corporations, but also to individuals to help them manage their money, their taxes, their family's futures. And it was kind of this crazy thing that those services don't exist in a meaningful way for folks who are not already affluent. And so we got really excited, me and my co-founder, about solving that problem and bringing that to the masses. Amazing. Walk us through how the product works at Origin and where do you sell it and how can an individual have access to it? Yeah, absolutely. So I mean, starting with the problem, the single largest source of stress for adults, bar none. If you think about any decision that you make, it often has a financial component to it. Where you're gonna live, you know, before we got on the call, we're talking about you and I, where we're gonna send our kids to school, private school, public school, huge financial consideration. What job you're gonna take? What vacations your family's gonna take? What car you're gonna drive? When you wanna retire? These are all questions that, at first glance, may not appear to be... financial questions, but when you get down to it, most of the decisions are money decisions in some form or fashion. And so it's not surprising that that's a significant source of stress for people. Now, if you have means, if you've got a million, two million, three million dollars or more, there's a massive, massive industry of folks out there who are gonna be knocking down your door and more than happy to go and work with you to help you continue to grow your finances. that same dynamic does not exist for people who don't have significant asset base. And so the question that we asked ourselves at Origin when we were starting the company was, can we solve that problem? Can we build the same private banking wealth management experience that exists for the most affluent people for everybody? And historically, it's very time consuming and expensive to build these software products. But I think when we started the business and certainly... over the last couple of years, the cost of build software has come down considerably. And you've seen the advent of Parker Conrad coined this term, but compound startups, where you can really move back into an aggregation model for products and really be an all-in-one destination for certain types of industries. Ours is, of course, personal finances for the masses. So that's how we stumbled on what we wanted to build and what we pursue. And then from there, what we wanted to look at is how do you distribute this product? One of the very big challenges with consumer financial services, whether that's insurance, or banking, or investing, or estate planning, or taxes, is the cost to actually get in front of a customer, tell your story, and ultimately meet with them. What we found was that going to the source of this problem was a really interesting way to think about distribution. The source of the problem for people who are sub-private wealth levels is their paycheck. For 99% of people, if you don't have a trust fund, Your wealth management is coming from your employer and it's coming in the form of a paycheck. It's coming in the form of tax advance, retirement accounts, the insurances that you get, maybe equity comp. And so we said, let's go partner with employers to have them distribute this product and get us in front of their employees. And that's worked really well for us. Amazing. Thank you for sharing this. So for our listeners, your main customer would be the enterprise. You're going to the employer, trying to get to the end customer where they get the full value. I was listening recently to some Altman, which is now in the news because of that fiasco that we've seen is out and in and out. I don't know what's happening there. But when he was at Y Combinator, when he was the CEO there, he said that it's more important to have a hundred people who love your product than a million who just sort of like it. And that's why the first 100, the premise of the first 100 podcasts is about. So if we go back to Origin. How did you get the first 100? What were the most challenging thing? And is there any tactic that you deployed early on to validate like, hey, I really have product market fit? Yeah, I mean, I think there's so many different ways to measure product market fit. I think in a lot of ways it almost comes down to like feel at the end of the day. Another way that you could ask the question is like, do you feel ready to scale your go-to-market motion, your sales team? If it's not an immediate yes, you probably don't have product market fit yet. But I think ultimately the ethos of that comment is really thinking about your customer pain point and your customer problem. And this was something that is common wisdom. Everybody says that, right? Really focus on the customer problem. But that can be less clear sometimes until you really distill down how your business works. And so as you just mentioned, we're a B2B2C company. So we work with businesses to provide a service to the employee. And so we have this kind of two pronged go to market motion that's really critical. On the one hand... you need to solve a problem for the employer in order for them to get excited about this, but they're gonna get excited about it because you're solving a big problem for the employee. And so if you don't solve that problem appropriately for the employee, you're gonna have high customer churn, you're gonna have low willingness to pay, you're gonna have poor word of mouth. And so that was something that we kind of had to navigate our way through because there are certain things that you can do for an employer that they might really like, but don't actually provide value to the employee. And ultimately in a B2B2C business, whether that's an employee, it's a referral partner or something like that. If that end user is not coming back raving about what you're doing for that distribution partner, the business will not be able to be efficient as you scale. So first things first for us were great. We need to get in front of employers and we need to find out how we can solve this financial wellness problem for them. And I think the reality is, it's not pretty in the early days. You're networking, you're talking to friendly people who might be personally interested in this problem that are willing to give you a shot. heavy, heavy services, right? You know, the software's not built out yet. You're really trying to do things, you know, you're trying to do them in an automated way, but most often you're doing them in a manual way. And so for us, it was saying, great, who can be allies to us that will allow us to come work with their employees? And then what are the different services that we could offer and test in somewhat of a manual way where we can prove that this is a business that people want. And then once you've proven that it's a product people want, you can go raise the capital to obviously automate these things and look at. metrics that matter, margin, growth, things of that nature. So I think that the very short answer is, it's often not pretty. You really have to network, build personal relationships with people who are willing to test with you and grow with you as an organization, and then really just staying close with them. For my first company, we're in the office with our customers all the time. That's obviously less possible in COVID, but. sitting with them, understanding their work, for going to see them. And then once you've nailed it for one, two or three, they start to tell their peers, they want to tell people about it because they've participated in the development of your company. They're personally invested, oftentimes they're proud. This great company, I was a part of that, even though of course they're not an employee. And that's really when the flywheel starts. And I think that that's the ethos behind the construct of, you need a hundred people who absolutely love this thing before you're gonna be successful. Amazing. Thank you for sharing this. Hindsight is 2020, right? If you go back to the early days, you don't have enough funding. Where would you have focused day one? I would have reduced the scope of what we were trying to do and increase the quality. So we're a compound product business. So like our value to the ecosystem or to our customers is that they can do more things with us at a lower cost. and a better user experience because of the consolidation and price reduction and ease of use. So you have this constant conflict between doing more and increasing quality. And I think when you're coming out of the gates for the first product or the first two products, I would have gone deeper in those from a quality perspective before expanding horizontally. And that really gets back to like the first hundred thing, right? Like if you do that really well, you're going to get that hundred people who love it much sooner. That was definitely a mistake that we made. I was going too broad too soon. You know, if I was to go back and do it again, I'd be narrower on a, from a product perspective and I'd be narrower from a TAM perspective as well. So it was very, being very specific. As an example, generally in the benefit space, companies that are growing very quickly, VC funded companies, growth stage businesses, they spend a lot of money on benefits because they're competing for top, top talent that they need to go out and retain. So. you know, a few hundred dollar increase in the benefits budget for an individual as compared to a $30,000 recruiting cost. And then, you know, an additional $20,000 to retain is very, very small. And companies are really willing to invest in those things in new benefits because of the value of retention. So it would have really honed in on nailing it there with a really, really narrow product and then expand it out. Makes a lot of sense. Thank you. Thank you for sharing this. If I'm a founder today that doesn't have any sales experience. and I'm starting from scratch, right? What do you think would be the ideal role for me? Do I, you know, go into the weeds and try to lead a founder led sales strategy, or would I get my first hire that's better in sales and then get in front of the first customer? What's your thoughts on this? The founder has to do the first sales, in my opinion. I don't think that you can outsource early sales. Maybe if you're a repeat founder, you're raising a huge sum of money and the product's fully baked and maybe you come from that industry, so you're validated. But I would say for the typical first time founder, it's your first time, you have very limited funding. It's really critical to spend an immense amount of time with your customers and your prospects. Ultimately, the first 10, 20 customers, you're not actually selling them. You're generally coming to them and having a conversation often over a coffee or very casual phone call, they're giving you their time. And you're telling them about what you think you can do for them. That's why they're getting on the phone with you. And so it's less of like a sale initially, and maybe all sales should be more like this very consultative in nature. But if you can delete the word sale and change your title as that founder to consultant, I think that removes this connotation of like, Oh, I need to be slick and I need to be salesy, which is a, I think a negative connotation. I think a first time founder needs to say, I'm solving this problem that I believe this person has. I want to be a consultant to them to help them solve that problem. If you approach it in that way and approach a prospect and say, Hathi, you have this podcast and I know that reach is really important to you. I have a way where I think I can amplify your reach. Would you be open to just hear me out and let me tell you how I can do that for you? Now you're out of this sales mode, but obviously you are still closing a sale because it could be a prospective client. So I think that's critical that the founder does that. You'll also of course know if you're missing, you might say, I've tried that before, it doesn't work. This is what I'm thinking about. And now the founder who's often leading product is hearing from a prospect what they need to incorporate into that product. So having that tight loop is really critical. And then I'd also say, the best salespeople, they have great bases and they have really significant commission structures. They're very, very well paid. So I would argue that the quality of salesperson that might be willing to take... a leap of faith like very early with on a product that is not proven out, like probably is not going to be an absolute killer. And I think that the founder who's going to be immensely passionate about it is probably the best person to solve that problem. Thank you for this advice. Very valuable indeed. If we were to look at your, your career so far, so you have one exit under your belt, two companies, one company is really hard to build. You've done two. If you were to go and look at the few major things that you had to learn. from the first startup bring with you to origin, and then things that you had to unlearn to make origin successful, what would those be? Yeah, I think that I would really focus again, like deeply on the user problem. I think that once you've nailed that, I guess let me take a step back. It's all about focusing on the user problem and that's for two reasons. One is of course, that's how you have a happy customer who's gonna go and talk about your product, your business, whatever. The second is, you need to really distill that user problem down to a very, very granular level so that people who are gonna work on this project can understand it deeply and feel it and get inspired by it. So I think where a lot of companies miss the mark is they haven't totally nailed that consumer problem or user problem and how they're going to solve it. And ultimately that feeds its way into more diluted strategy at the business and ultimately less buying from the people working on it. So if you're not really clear on the impact that you're gonna have at the customer level, it's really tough to go recruit and retain people. And ultimately, the number one thing that I would think about is really nailing that as a way to pave the way to building just an elite group of people that are gonna be committed to the company. I think what I've learned through COVID, and I think many startups went through this, is that businesses compromise on their hiring strategies. to fill seats during a time when headcount growth and growth were being rewarded significantly. And what we found internally at Origin is that our top people at the company contribute more than 10 average people would. And so really weaving that ethos into the business as you construct your early team and you build your user story and you really build the ethos around that is how you can have magic, the business and ultimately... build an amazing culture, a great product, and fundamentally a strong enterprise. Amazing, thank you for sharing that, Matt. So being a founder and CEO and a leader in any organization is sometimes lonely at the top. You sometimes go into these situations where you have that imposter syndrome. Am I doing things wrong? What's happening? Am I at a crucible moment? What have you done throughout your career to continue growing and keeping up with the business? especially when you have so many people that rely on you, coaching, reading, mentorship, anything that you can share with us that has helped you continue growing? Yeah. So it's a great question. I mean, I think that that's probably the most common thread that I found amongst founders, whether it's my friends or my wife or other folks who have gone through this is exactly that, right? You have this idea that you're really excited about, you've raised capital, so you've got... other people who are depending on you, you have employees who are depending on you. That can be really stressful. I don't know that I'm familiar with a business that's just gone one way higher, right? There's always those moments where you made the wrong call, you made the wrong hire, the market has turned, a customer is upset with you. There's a limitless number of challenges that will be thrown your way that often serve to reduce your own confidence. So for me, I think it's one, just acknowledging that that's normal. That's a part of the journey is that these things are going to happen. Two, it's talking with peers. So being a part of groups of other folks at the similar stage of business building is really, really critical. I've actually done a lot more of that recently. Having a coach. So I have a coach, I've had a coach for a long time. Just kind of talking through these things. And then I'd say like, you know, really being passionate about the problem that you're solving goes a really, really long. When I think about, you know, man, are we making the right decisions? You know, are we doing the right things? I come back to the problem that we're trying to solve and realizing that what we're building needs to exist and it should exist. And the combination of all those things has been, I think, really critical. And what I would recommend to someone else going through a founder CEO position. What's the principle that you live by that has served you well in your journey? I think if you ask someone else about me, you know, as it pertained to that, it would be just like, the will to keep going. I think that kind of circling back on the first question, you know, that's probably the reason why most people don't make it is that they throw in the towel, they throw in the towel too early. And if you're unwilling to throw in the towel, I think you increase your chance of success by a very, very significant amount. I remind my friends of that. I remind my peers of that when they're kind of going through their tough moments to just, just keep going, keep going, recommit to the problem, recommit to the customer. And when you can do those things, like good things come your way, you'll have happier employees, happier customers, and ultimately it works itself out. And that's something I'd say every year over the last 10 years since I've been doing this, you kind of have a one or two or three of those moments where you just really kind of get knocked on your rear end and you've got to dust yourself off and just say, okay, keep going, keep going. And every single time that's worked out for me. Can you share with us an anecdotal story about a crucible moment in the life of Origin and also a proud moment? Yeah, absolutely. A difficult moment, I think, that we had earlier this year was kind of right sizing our company. We were a business that was very fortunate to raise capital up through a period of pretty significant growth and tons of IPOs, a lot of capital in the ecosystem. And we came to this moment late last year where we said, look, we've actually over-hired. We've got to right size the company. And... That's a tough thing to do. That's a tough thing to share with executives, to share with the rest of the organization, and ultimately to move on. Yeah, because you've got a lot of people who you've hired and you've brought into the company, and ultimately you failed. You made the wrong decision to bring these people on and expand the company ahead of where it should be. And so I think, you know, what I learned through that was there was a lot of kind of shame and fear going into that. Ultimately, you make this decision and what you end up happening is if you take care of the people on the way out, your organization will strengthen from it. And I think that that's ultimately what happened to us this year. We've had our best year ever from an organizational perspective after we conducted reductions in the size of the company. I would similarly kind of like provide the other side of that coin as a very difficult moment turning into a positive one. After we did that, we really kind of got the team together and we kind of regrouped and we said, what's it We rebuilt the business from the ground up. And if you look at our product, if you talk to our folks at our company, even though we've recently gone through, what I would argue is one of the more difficult moments that we've had as an organization, you know, our EMPS is as high as it's ever been. I think that the commitment to the business is as high as it's ever been. The pride that the people have in our organization is as high as it's ever been. My learning was that doing the really hard things, and I guess taking a step back, why is it hard? I was scared that it would destabilize our business and that people might say, is this the place for me? Do I want to work here anymore? Doing those hard things as a leader, ultimately, if you do them the right way, garners respect from your peers and the folks that are working with you and ultimately allows you to kind of reset direction and make sure that you're doing things the right way going forward. And so we've changed our hiring processes, we've changed the way that we run the company. And so that's something as I look back on it, like this year in totality, building an excellent product and really kind of doubling down our customer is something that I'm really proud of. One last question, Matt. What's next for Origin? I walked through some slides yesterday on all hands and what I was showing my team was if you think about these big things in life, like going from point A to point B in a city, first brand that comes to mind is Uber. Watching a movie at home, the first brand that comes to mind is Netflix. When you think about managing money, it's not immediate what comes to mind. There's a lot of different brands. There's a lot of people that do pieces of these things. We've spent the last four years building all of these things in one platform, but we've done very little by the way of marketing. So we're going to really hit the gas to grow this company and really get our brand out there over the next 12 months. So I'm really thrilled about that and I hope we'll do this again at some time, maybe 12 months from now. And you know, we think about mass market wealth management, that's going to be Origin, the place where you can go do everything with your money, that brand will be out there. So that's what we're excited about at Origin and that's what I'm really looking forward to over the next year. Matt, this has been a blast. Thank you for stopping by. I want to be mindful of your time. Where can people reach you and are you hiring? We are, we're hiring for a number of roles across the organization. My email is matt at useorigin.com. So please reach out. If anything I've said resonated, would love to either be a help, talk shop, do anything. Thank you very much, Matt. And we wish you the best of luck on your journey at Origin. Thanks, Hadi. Awesome being with you. Thank you so much for listening to the first 100. We hope it inspired you in your journey. If you're enjoying the podcast, please subscribe to our podcast on Apple iTunes, Stitcher, Google Play or Spotify and share it with a friend starting their entrepreneurship journey. Leave us a five star review. Your support will help spread our podcast to more viewers.