Anatomy of a FinTech Startup with Drew Scholtens of OinkChing | #054

Nissan Leaf with a concrete mixer shoved in the back

Last Updated on September 9, 2020 by Tim Harman

What are the nuts, bolts, and mental game that go into a FinTech startup?  On this week’s show we tackle just that as we hear from special guest, Drew Scholtens of OinkChing.  Drew is bringing to market a fresh approach to financial literacy.  Listen in as we discuss everything from raising capital, leaving a high paying corporate job to pursue a dream, leaning on family and friends for vital support, and shoving a concrete mixer in the back of a Nissan Leaf.

You can connect with Drew HERE on LinkedIn.

Check out OinkChing at

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Transcribed by and then edited some. There may be mistakes. 🙂

Tim Harman 0:00
Welcome to the You can, man.™ podcast episode 54. I’m Tim. And I’m Drew. And on this week’s show anatomy of a fintech startup.

Hi guys, welcome back to the You can, man.™ podcast where we believe what one man can do. You can do as well with a little help from your friends and the proper know how guys, things are a little bit different. Now, you may have noticed our last episode, I was just me and didn’t have Dave or Josh. And this week I don’t have Dave or Josh because Corona. That’s pretty much why because we’ve just got craziness going on with Dave and Josh’s work life balance, I guess is probably the best way to put it. And so we’re trying to figure out, doing remote stuff going forward. But honestly, they can’t even do remote. stuff right now because things are just crazy. So we’ve got Drew Scholtens here on the show with us. Drew, say hello.

Drew Scholtens 1:08
Hello. I can. I can, man.

Tim Harman 1:10
Yes, and Drew is a longtime good friend of mine and probably one of the most interesting dudes I know. I mean, honestly (setting the bar). I mean, you know, if you want to know a little bit of something about everything, just ask Drew. (yeah, little something about everything..haha) Yeah, that’s pretty much Drew. But he’s going to you know, he’s just from the podcast temp agency. I just called them up. They’re like, they’re just gonna send Drew over (send me the rookie). Yeah. And so we are going to be talking about his fintech startup company and what goes into that. So stick around some very interesting stuff we’re going to be talking about, but first, you know, I don’t think I asked our last guests Brandon this question, but we always try to ask guests. Where are you on the DIY scale 1 to 10. Drew, where are you at?

Drew Scholtens 2:01
1 to 10. I’m a three and a half trending towards a four. We’re making progress.

Tim Harman 2:07
I would call you higher than that. (Yeah?) Yeah. I call you a solid six. No?

Drew Scholtens 2:12
Maybe I’m a six on the millennial scale. Okay, three and a half if you add in the baby boomers.

Tim Harman 2:16
I’m gonna call you eight since you try stuff.

Drew Scholtens 2:19
I do try things. I have no problem. Going for the fail.

Tim Harman 2:23
Yeah. Drew once sent me a photo of, I believe it was a concrete mixer, (concrete mixer) in the back of his Nissan LEAF? (Nissan LEAF. Yeah, yeah.) And I’m just like, bro, that’s impressive.

Drew Scholtens 2:36
Well, I had this I have this torn up driveway and the kids can’t play on it. It’s all just aggregate. So I thought if I can just put a new top on it, it’ll buy me a couple years and I can kick the can down the road and then we’ll be fine. So I ran a test I bought three different concretes I made a nice little top layer, pick one I liked. And then I bought two pallets full and a concrete mixer and thought I’m just gonna put it layer on the top and buy me a couple years and it fits. miserably it backfired horribly. And

Tim Harman 3:05
Yeah, it’s pretty bad. It’s bad. I’m gonna say it’s pretty bad.

Drew Scholtens 3:07
Here’s one benefit when cars pull in though, I can hear the crinkling noise of every car that pulls in my driveway before they ever get to the doorbell or they’re just turning right it’s a safety feature now I’m thinking about when I replaced the driveway actually doing it like stone, because I like hearing cars on my driveway.

Tim Harman 3:20
Yeah, there you go. You should just tell people it’s kind of like this. It’s just this really highly specialized treatment that you paid like a lot of money for. Yeah, you know,

Drew Scholtens 3:28
Yeah, except all my neighbors saw me do it and heard me cussing so not sure that would fly.

Tim Harman 3:33
Yeah, but it’s pretty bad. But hey, man, A for effort there. Sometimes, you know, you just can’t, you know, you can’t man. You know, sometimes it just happens (Different podcast. That’s the competitor podcast) But hey, now you know.

Drew Scholtens 3:44
I do. And now we’ll always have that picture of a Home Depot cement mixer sticking out the back of a Nissan LEAF forever.

Tim Harman 3:51
We actually need to pull that I need to I need that photo. Let’s find that. You know,

Drew Scholtens 3:56
it will be less embarrassing, actually. Yeah,

Tim Harman 3:58
We’ll post that on our Instagram stories or something like that. But yeah, obviously, you know, we’re always talking about how our weeks going well, I think we could just say unprecedented. I don’t know. I mean, we got the kids home from school. I mean, it’s just crazy. I I’ve never experienced something like this and I pray and hope that we never do again. I went to Costco the other day (ooh) and had to wait in line to get into the store (That can be harrowing on a Saturday, normal times.) Exactly. And honestly, I was I was telling some other people about it. It was actually one of the most pleasant Costco experiences I’ve actually had

Drew Scholtens 4:37
People were being extra nice?

Tim Harman 4:39
Well, no, because they only allowed like 100 something people in the store at one time. That’s why I had to wait in line. So it was basically like, they’re literally counting people coming into the store. And then as they come out, they’re deducting and then letting people trickle in and out. And so there wasn’t this like mass of people that there literally always is because Costco is pretty much always apocalyptic. And so that wasn’t present there. And they had tons toilet paper.

Drew Scholtens 5:07
I dropped my Costco membership after I did a lengthy cost examination.

Tim Harman 5:12
Yeah. Oh, yeah.

Drew Scholtens 5:14
Yeah. So I mean, you know, you think Costco is is the Done deal, right? You can buy in bulk, everything’s gonna be great. But I went line by line and looked at what I could do and how I could beat it. And when I figured out how to beat every line of my Costco membership, we dropped our membership. I like going in there that was the problem. I liked it too much.

Tim Harman 5:28
You went in with families and men This is that’s probably like another podcast like episode right there just in and of itself, but drew went in with some other families in on like some essentials literally like toilet paper. Yeah. And you bought in crazy bulk buy in bulk and saved a boatload of cash.

Drew Scholtens 5:46
I can I can beat I know where the cheapest toilet paper, facial tissue and paper towels exist in this planet. Man, I buy them in bulk. And then I got a couple families that we share. This will basically they’ll call me up in order for me and it just you know it costs I’m not marking it up but it allows me to buy in bulk And still turn over my inventory. And I sent them all photos. When this whole toilet paper thing went down I sent photos to all my all my people and I was like Haha,

Tim Harman 6:09
like stocks just went up.

Drew Scholtens 6:12
This is how Noah felt, you know?

Tim Harman 6:14
And you now owe me triple

Drew Scholtens 6:16
Yeah, exactly. Now I haven’t raised my prices yet but I have court I have I have limited to supply you know, they’ll call it a bunch. I’ll be like, you can’t have a bunch. I gotta keep you on the leash.

Tim Harman 6:24
Yeah, so at Costco, you could only get one. But I did hear a Costco employee telling a customer. Well, you can only get one but you can get one of each kind. So if you wanted to get the Kirkland brand and then the Sharman and whatever they got it’s you could have done that.

Drew Scholtens 6:40
It’s an it’s an entirely temporary thing. I mean, the reality of capitalism is now that you’ve got a massive demand supply will follow pretty quickly and in in literally six weeks. They’ll be having deals overstocked and toilet paper. Oh, yeah,

Tim Harman 6:52
I mean, I thought the same thing. I was like, why are you people doing this like literally wait a week, and I was right.

Drew Scholtens 6:59
It was living One of the least valuable things in a Japan anyway. There’s other ways like you can use tissue paper. You can I mean, there’s lots of ways Yeah, Job done so and

Tim Harman 7:09
Who are you people that don’t like kind of just stock this up? Like, I feel like at any given time, we’ve probably got I mean at least three weeks worth of toilet paper in the house Yeah. Now maybe that’s because we’re Costco people and we’d just buy the big thing you ask people yeah, type of I guess maybe other people you know, I have to remember you know, people don’t have room for it and stuff like I’m fortunate enough we’re in a house with a basement and so you know, we could shove the extra toilet paper down there anyways, probably enough talk about toilet paper, but everybody’s doing just crazy times. Guys. This is just like, insane. I’m sure we’re going to have stories to tell in our coming podcasts over this. But hey, I do just appreciate all of our listeners, faithful listeners. You know, look, I know that I can’t replace Dave or Josh I just can’t do it. So I appreciate you guys sticking with us. And hope hopefully, I’ll be having some other guests on if I can’t get Dave or Josh back, because they’ve just been crazy with the job stuff and everything. We’ll be having some other interesting guests on as well. So let’s get into talking about Drew’s fin tech startup. And this is not gonna be long form, we’re just gonna kind of go through the initial stages with his thoughts behind starting it, the motivation to start it, just the mental game behind it, as well because we talk a lot on the UK in May a podcast about you know, accomplishing things that you think you can’t write, and getting help from friends, and then doing those things that will then build confidence in other areas of your life. And so I feel like drew has a background where he has done a lot of harder things. And climb the corporate ladder, giving him the confidence to do what he is doing now. So we can say the name of it. Yes.

Yeah, we can say okay, so yes,

it’s official enough to where we can say the name. He does have a website. Yeah, I trademark so the name is oink. Ching. Now, you may be thinking that’s weird. That’s exactly right. It should be weird because you’re gonna remember it.

Drew Scholtens 9:23
So just just think of a pig, and then a piggy bank. olink Ching. Right? Remember that you can go to Oink Ching Comm. and sign up already. There’s all these theories about good naming conventions, right? And you go through all these experts, you meet other startups, you meet business people, and you put your names out there. And you’re sort of putting yourself out there when you when you pick a name that you love, and you want to throw it out there and say, What are you think about this name? invariably, you get all these opinions about whether it’s good or not, like baby

names. It’s like baby names. Yeah. And ultimately, the baby’s gonna look like whatever you name it. Okay,

Yeah, that’s true. Have you ever met somebody mean? Like, you’re not a john? No, you’re john, you’re john, because you would call the john. Right. So ultimately, you know, my personal value is that the the product will sing for itself and the brand will follow the value of the product and needs to be remembered. You hear anything that’s different, and then it makes you makes you go and investigate whether there’s this thing. Yeah. And then hopefully, the value is there. And we run from there. So yeah, I chosen and there’s a little bit out there that I’ve gotten a lot of advice.

Tim Harman 10:27
Yeah, and we’ve talked about before, too. There’s all these company names that we just completely take for. take for granted is the right word, but we don’t think about it at all because and they’ve got weird names. I’ve even talked about in the photography industry I’ve got these little radio triggers that trigger lights, right. It’s called pocket wizards. How stupid is that? But among photographers, you start talking about pocket wizards and they’re like, Oh, yeah, okay. I have like 10 of those (the value is there). Okay, cool. Yeah. Anyways, point being, you’re going to remember that, OinkChing (Yep). So It is a you heard me mentioned it’s a FinTech. So that for those of you that don’t know, because I don’t know, maybe a few years ago, I didn’t know what that was, I don’t know. Financial tech. Okay. So this is this describe any any company that’s basically working with any other type of financial institution? Yes. You could say Yeah. And so that’s what Drew’s startup is is a FinTech company. And so Drew, take it away. Tell us, give us the elevator pitch on OinkChing, and then we’ll kind of work our way back. Maybe from there.

Drew Scholtens 11:32
Yeah. So OinkChing is it’s not your traditional FinTech in that we aren’t giving loans. There’s no deposits or lending going on within the tool, most fintechs that’s kind of what they’re trying to do. They’re building technology to help ease the lending cycle. That’s not what we’re doing. I come from 12 years in the corporate world, I worked for a company that you all probably know and love called Equifax. That would be a credit bureau and spent 12 years there and had a great run for about 10 of those 12 years. And I saw a lot of things and learn a lot of things. And I saw a market opportunity in really what is the financial literacy space, and there’s an ample amount of companies and opportunities for you to go out and find information about different financial tools. But there’s a couple things missing. scale, accessibility, the way the information is presented and provided and structured. I think they’re just wrong. I just think they’re wrong. And I’ve, I’ve looked at almost every financial curriculum out there from start to finish, and I look at each one and think, man, but they’re leaving out so much. And so this all kind of started out of a. I’ve got three kids, twin eight year olds and a four year old. I’m thinking about how do I raise them to understand money the way I do? I’m cheap, thrifty. You know I’m not trying to get myself a badge here but yeah, (you are, you are) kinda a big deal. And I got rid of my Costco membership because I literally did a per unit cost of everything on my bill. So that tells you who I am (Drew shops at Aldi). I’m an Aldi, online, eBay, Amazon guy. Shop the sales

Tim Harman 13:01
Oh yeah, we’re Aldi as well.

Drew Scholtens 13:03
Yeah. And so we… It was really an opportunity for us to think about how do I put all this together to create one congruent intelligent soup to nuts, financial literacy program and then you have to solve the problem of how do you present it for the new age for the new generation? How do you scale this thing? And so what what he does differently is not only do we prevent present everything in kind of YouTube style content, along with a simulator, but we bring in the banks and credit unions so that they’re forming a relationship with you. And that allows us to offer a lot of what we do for free. Yeah. And so any consumer whether you’re in the inner city or out in the country, or in a you know, David’s vineyard what it was the fancy feet, Martha’s Vineyard, yes, yes. I’ll never be there so it won’t matter. You will, you know, you know, anywhere you live, this is a this is something to be something available for you that you can learn how all the pieces fit together and then go really in depth as other things. Missing in financial literacy is the ability to really in depth on things like 401, K’s and mortgages and managing your house as an asset, jobs careers and thrift. I finished writing a thrift course it’s 38,000 words, it was line item by line item through everything that you an average American household actually spends money on and, and teaches you why the prices are set they are, how to negotiate, and what to do in that space to minimize your costs. It’s an incredibly detailed approach to thrift. I’ve written the course now we’re starting to shoot it.

Tim Harman 14:27
Yeah, and the way that your program is set up, you know, it’s it’s teared, you know, you can pretty much go as deep into this as you as you’d like to go, right?

Drew Scholtens 14:36
Yeah. So you kind of opt in, we’ve got a lot of interesting angles here, because I’m trying to solve a lot of a lot of problems with one company, I suppose. But but one is the idea that you need a tool that you’re going to use the rest of your life. And so actually our pricing model, there’s a lot of freemium, you know, free services that you can get your hands on. That’s because the bank and credit union is supporting this whole structure. So you’re forming relationship with a bank or credit union that wants a relationship with you. And then this more Advanced curriculum you’re purchasing, but when you purchase it, you own it for life. And so we continue to update. If you bought the tax course every year, we’re updating the tax information, but you bought it five years ago, at five years price. So you’re really buying education as an asset, you’re gonna hold the rest of your life. And you can easily come back to and what people need in their financial education is really what they care about right now. So when you’re 22, when you’re 24, when you’re 36, when you’re 55, you care about different things, right? When 55 you’re thinking about taking care of an aging parent, you think about retirement, when you’re 24. You think about buying my first car, looking at houses, career choices, when you’re 18. Right, you’re thinking about college choices and scholarships. So your needs change as you grow up. And as you run into new life events. And the tools to really deal with that are what we’re trying to present you at the time that you need them, you own them. They’re forever thereafter,

Tim Harman 15:50
right? And you even have kind of a model set up to where if it’s a minor, they would essentially have a sponsor. So obviously that would first and foremost, probably be a parent. But it could also be, you know, the, one of the or the teacher at their school or a really close uncle or some, somebody that’s going to sponsor this be like, hey, look, I think it’d be super value valuable for you. And I’m going to sponsor you to go through these courses.

Drew Scholtens 16:16
Yeah, we call that the guardians. My parents are down in Florida in this giant retirement village called the villages. It’s like 200,000 people (♫The Villages♫, that one?) happiest place on earth is what they say.

And, you know, it’s a magical place for some, and it’s all old people everywhere, just living out their glory years, and God bless them, but they’re also all looking for this desperate connection with their grandchildren. Yeah. And so one of the things we’re going to drive is the term guardian. So when someone who’s kind of 14 to 24 joins our platform, they can go through a simulator that literally puts the entire financial story in one package. You will learn everything from first jobs, income taxes to thrift tithing to tax deductions, to mortgages to life insurance and HMOs and PMO, you’ll learn it all you will learn it all. Everything that’s financial is in one curriculum. It’s kind of a survey course, a guardian then can join you in that in that process and actually go along with you and your education. And then you can have conversations across the dinner table or on the phone, hundreds of miles away. And so we’re going to pilot that obviously, both in the villages where there’s a bunch of grandparents looking to make, yeah, this is the grandchildren as well with just parents and students.

Tim Harman 17:25
Yeah, I mean, how many of you guys listening to this right now that have younger children…you’re thinking, first off, I really wish that I had had that when I was 16. Right? Cuz man, I did not get any of this. I remember we had I had like one little financial kinda course, it was like, almost tied to the like Home Ec thing, which I don’t even know if they have Home Ec anymore. And I think this was in middle school, and I remember them teaching us how to write a check. That’s pretty much and like maybe balance your checkbook, right? But that’s really all I remember. And I didn’t have a whole lot coming from my parents as far as financial literacy. And so, man, I’m just thinking I would have loved to have had this when I was a teenager. And I will love to have this for my kids, for sure. Because and how many times you know, we go back and forth, we’re talking about what they really need to be teaching them kids and school is about this. And that’s what Drew’s doing. It’s literally what Drew is doing. And my hope is that you can get this program into the schools eventually would be would be amazing. But, you know, until then you got this guardianship type program set up to where I think that that’s going to be really successful as well.

Drew Scholtens 18:36
We’ve got some opportunities, invitations to go meet with school boards of schools that do homeschooling. So there’s some one around here called King’s Academy. They two to three days a week, students go to the school, they have football and they’ve got prom and they’ve got all the things that a normal high school would have, but then you homeschool three days a week or whatever the option is. And it’s a perfect curriculum for them because it kind of does that balance of home and school with a guardian over top, and I don’t know if the public schools will ever get to the point where they can integrate something like this. You know, there’s there’s been awesome education platforms out there like Khan Academy for years that have trouble getting into public schools. My entire solution here was how do I scale without the schools. And then I think what happens is in time, the schools catch up and they realize, Hey, now there’s infrastructure in place and demand, we can now integrate this into our curriculum, but I think it’s gonna be years before the infrastructure and support is there to push this kind of stuff. In a public school setting. I think private schools and homeschool settings are really where we’re gonna cut our teeth in that area. I think parents and children will just do I mean, every parent that we’ve kind of thrown this out there and walk them through says, I wish I had had that and I wish I have that for my kids. So that tells me I’m right on top of an option that I think will will scale really well. (Yeah). Now I almost didn’t come on your podcast. Did you know this?.

Tim Harman 19:51
I did. I did know this. Yeah.

Drew Scholtens 19:53
Because I told you know, unequivocally and with like, within like seconds, right. Yeah. Because I was like, you know, I don’t I mean, you you want to understand the life of a startup. And I don’t have anything.

Tim Harman 20:02
Right? Right. Right and and that’s fine because you’re you’re but but I explained I was like, Drew, that’s totally fine. Come on anyways because really so now you’ve heard you’ve been you’ve been told elevator pitch and then some on OinkChing and so you’re, you know the concept and everything but what I wanted to spend the remainder of our time talking about is just a mental game. Yeah, behind this, you know, even developed, you know, you have a very small team now, but you know, you’ve had some, some challenges we’ll say, with some of that and just, yeah, even just choosing the choosing the right people like bringing those things together, all the legal stuff, you know, like we’ve I’ve listened to you for, you know, we’ve met and hung out. And I’ve just heard you talk about all the legal stuff that you’ve had to do all the, you know, how to divvy up shares and stuff like that, because you’re doing all this legwork for when you do become successful, and those are things that you have to do That takes an incredible amount of time on the front end, but pay huge dividends. No pun intended. Yeah. In the future, right, yeah,

Drew Scholtens 21:12
it feels like you’re pushing up a ball, you get this feeling that eventually the ball is going to start rolling down the hill, and all you’ll need to do is course correct. But when you’re starting off, you’re doing nothing but pushing a ball up a hill, and you literally feel like every day if I don’t wake up and do something that nothing will get done that that’s just literally how it’s all gonna play out. And most days, it’s exactly what it feels like. It’s absolutely brutal. And I was like, I don’t have anything to share me don’t have, I can’t sell you the product today. We’re still in product development. We’ve raised about a quarter million dollars, family and friends. And we’re living off that.

Tim Harman 21:39
Which is no small task. That is that is something to celebrate right there.

Drew Scholtens 21:43
And the reality has been both in Atlanta and in the US this time. There’s more infrastructure for startups and there’s ever been, there’s pathways there are incubators, there’s ways of doing things that are kind of pre determined. There’s tools, you know, for our shareholders, I’ve a tool online that all shareholders can see their share. Track transactions, look at what’s called 409A valuations. You can do all sorts of things on that tool just a couple years ago, those tools didn’t exist. And now there’s three or four companies that are, are actively presenting that tool. And oftentimes those tools are free to the to the small guy, of which I still am. Co-working space, I just signed on with a co working space here in Marietta, literally this week, I can’t go in now. So that was kind of waste. But I share desks. And it’s a place to go and commune with people and get to know networks and just have a place that I can meet in a conference room with my developers. So we can talk face to face with a whiteboard and a screen. There’s all sorts of resources that exist today that never existed before. Nevertheless, it still takes the same pint of blood, you know, pound of sweat every day pushing the ball with no guarantee that you’re going to make it the only reason I’ve got any shot of this, frankly, is because the whole house is kind of behind this dream of mine. And because of that, you know, it’s easy when you’re when you’re young. It’s easier when you’re younger and you got nothing to lose.

Tim Harman 22:57
Shout out, Allison.

Drew Scholtens 22:58
Shout out Allison. Yeah, it’s my wife. She’s a mega awesome, she’s, you know, there’s a lot of stress that goes into watching the bank account go down, day after day.

Tim Harman 23:08
Yeah, and just to let our listeners know, to like Drew’s potential in corporate America for making really, really good money is high, he came out of a high position at Equifax. And I do feel like that played a big role in just giving you the confidence to do what you are doing. But all that to say, you know, you’re stepping out of this great job at Equifax or you know, wherever you could have gone or whatever. You could have kept climbing for sure. Yeah. And, you know, and then stepping into something like this. That’s huge.

Drew Scholtens 23:39
So I was the youngest. I was youngest Vice President at Equifax. I was Vice President at age 28. You know, so I’ve gone from inside sales rep to Vice President and at the time that I’d gotten promoted, and had gotten promoted since then, and things were really bright for a long time there. Obviously the breach and a series of other events sidetracked my career there, but you’re right could have just stayed in the corporate world kept it safe. I don’t know if I would have been happy though. And that’s the thing is I’d rather…

Tim Harman 24:05
I know you wouldn’t have been bad. We had many conversations about that.

Drew Scholtens 24:08
There comes a time where it just if I wasn’t climbing, trying to do hard things that I just wouldn’t be able to wake up in the morning. And so even in the corporate world, I always took the hardest job I could find the one I wasn’t qualified… How many times have I said to you, I’ve never been qualified for any job that I have ever actually had. And you just I figure it out. Right? And I become qualified no sooner do I feel good and qualified and, and hit a home run that I turn right back around and take a job that I was utterly unqualified for and start all over again. So you know, one of the things was just like when I left it was this is it. I’m gonna put it all in here and let the chips fall where they may

Tim Harman 24:43
Yeah, and you have that you have that drive and that attitude in you to not be afraid of learning completely new things. Like you’re cool with jumping into something new and learning it and that’s what you have to have to be an entrepreneur.

Drew Scholtens 24:57
It’s like the You can, man.™ of business. (Yeah.) Like this this year I’ve, you know, I’ve incorporated in Georgia unincorporated in Georgia reincorporated in Delaware, hired a legal team done a bunch of trademark copyright work, written curriculum, shot video, edited video built a YouTube channel. I mean, it’s one thing after another, right built technical requirements, test cases, everything. entire stock certificate, a funding program, what’s called a ppm, which is something that you’ve got to present investors with when you can take unaccredited investors. Right?

Tim Harman 25:27
Yeah, that was something really interesting to me. So just a little side side note kind of thing of how many investors you can take that are what, quote unquote, unaccredited. So they are not… Explain that, because I’m gonna butcher it.

Drew Scholtens 25:42
Yeah. So the US Securities and Exchange Commission basically says that, if you’re going to raise capital, you can raise capital from whatever capital you want as much as you want from accredited investors. These are people with a net worth over a million dollars or who make joint over $250,000 a year and basically they can invest whatever They want, they’re called accredited, they’re free to lose their money however they want, if you have less than that or make less than that, you’re an unaccredited investor. And what that means is the criteria for which companies must report to the Security andExchange Commission is much higher, and it’s much higher to protect those, what are considered less sophisticated investors. Now, a lot of brilliant people don’t have a million dollars in the bank. So it’s not entirely fair. And so there’s, it’s not a loophole. But there is a way that you can qualify and say I want to take a certain subset of unaccredited investors in and they limit you based on your filing. So I’m 35 unaccredited, investors that I can take in to my my seed round, which is still technically open. And so I have to be very careful as to who I take money from, for lots of reasons, some of which are, I want to make sure that my leadership and investors share the same commitment to what I’m trying to do as I do. This isn’t really about a get rich thing. Maybe we’ll all get rich. I hope we all get rich. But that’s not necessarily even the primary motivator of this whole thing. And who I bring in also has to be their credit. unaccredited and with unaccredited, I really have to be careful that this is somebody who I’ve presented everything to as honestly as I can. So I have to provide more documentation to them to make sure they understand the risks of going into the thing because you lose it all. Yeah, it’s, it’s, you know, it’s almost casino royale except the house is stacked against you, because more startups fail than succeed. So when you’re when you’re investing, I started to hear the stories of the first investors in Google, you know, well, that’s those are unicorns. Those are 1 in 100. (right) Or 1 in 1000 probably, you know. So, when something like this, it’s really you have to understand any dollar you put in you could you could lose Now, that’s not looking so bad. Eight days into a stock market crash right now, is it? Yeah, my investors have lost nothing in the last 8 days. Right. Right. So risk is risk is relative, is my point there, but it was all crazy. I mean, I don’t know any of this. In fact, it was oftentimes in passing that I would pick up on tidbits, I was talking to my lawyer, who mentioned in passing, oh, you know, you have to file this thing. And I was like, Oh, yeah, definitely. Then I get off the phone and I’m….

Tim Harman 27:58
Then your Googling..

Drew Scholtens 28:00
Figuring out what it was and I was like, oh, shoot, he was totally right. And thank goodness I paid for a good lawyer. So, you know, a lot of time on these things…

Tim Harman 28:07
The barriers to starting even a small business in this country, I feel like I don’t know, it kind of depends on how you look at it. But I think I take, like even this stuff that you know, I’ve run a small photography business and just just the stuff that I get to deal with every year, business license, you know, business personal property tax, like all this just stupid stuff, stupid stuff. I mean, it’s necessary stuff. But it’s just all these extra things that people don’t think about. All these people that just work for somebody else and their content doing that and they’ve never gone into business for themselves. Really don’t have any idea as to what goes into doing all this because I run a very small business, and it can be a big headache at times, making sure you got all those T’s crossed and I’s dotted and so… Man, even with you, and raising capital, it’s crazy. All the extra stuff

Drew Scholtens 29:06
I you know, I always met these entrepreneurs in this line of work, you meet other entrepreneurs pretty readily. And there’s this divide. There’s the separation whenever you meet an entrepreneur, they’re usually really exciting and really dynamic. But you also don’t feel like you get real close to them. You feel like you’re in different planets and, and the reality is, I think you are, I can sense myself changing in this process. It’s very much you with me or you’re against me mentality, which I’m not sure it’s healthy. I mean, I don’t know who I am at the end of this thing. I gotta be really careful and be really humble. Again, the wife helps with that. This is gonna be as much you know, her doing as mine for everything she sacrificed throughout this whole process. But the divide is that they understood what it took to build something. And you can’t possibly unless you’ve done it, too, so I feel as if I’m still I’m like, if we’re standing across the Grand Canyon, I’m right now down in the Grand Canyon, looking at both sides, wishing I was on either side. Yeah, but That’s the cost that’s what you have to pay and I may fail miserably. I might succeed on any variant of of great man. Either way at some point I’m going to be outside of this valley and I will I will have known what it took at least

Tim Harman 30:12
yeah and you feel like you You pretty much burn the ships I mean, you could go back to corporate america there is that but as for right now you are sold out on this you are going for it? hundred hundred percent

Drew Scholtens 30:26
something changes when two things happen. When one year your wife commits completely to your plan. So she’s got three jobs now. And there’s incredible blessing in that one of her jobs is VIP kids which is teaching Chinese kids English and so we heard about the Coronavirus web months. So we are stocked up on everything before the Yeah, there you go. We knew we knew because she had gotten this job with VIP kids. She’s got three jobs. I get paid a little bit on the company I make one eighth of what I used to make out of the company is it’s not enough even to pay the bills. In fact, it’s about one fourth of what it is pay the bills. But her income, my income, that combination is enough to slow the burn to a rate that our giant cash war chest that we built before we did this is going to give us a long enough runway that we should be able to see this thing. Right? Right. So that’s one. The second thing is when you take money from investors, those are people who invested at my stage and but an idea, right? They’re looking at me and my idea and saying, Can this guy do this idea? They

Tim Harman 31:25
are investing in you, right?

Drew Scholtens 31:27
There’s nothing else. There’s no other asset here, except me. Now, money invested a couple months ago, that was true. Now there’s a little bit of technology, there’s a lot of content, there’s curriculum, they can see the fruits of that labor. And as the things start to come together, nevertheless, when most of them invested, there was literally mean an idea. And so that’s a huge motivator. I mean, some of my investors are best friends. I grew up with some of them in my brother, my dad, my buddy growing up and his father, you know, they’re people that I care really, really deeply about. And so one of the motivations that wakes me up every morning is my investors, I have a different relationship with them. Those are people who are kind of a ride or die. I’ve always laughed at that. I thought it was stupid until now. And I’m like, now I get it, you know, ride or die? Yeah, so those two things, there’s no failure, the ships are gonna burn. We’re off to the races. And we’re going to do this thing, because there are there’s our community behind me who believes in this thing. And I just don’t want to fail them. And I’ll work harder for others and I will for myself.

Tim Harman 32:18
Yeah. See, these are the sorts of things that I wanted to hear this you’re exactly,

Unknown Speaker 32:22
exactly right. This is exactly what I was script you gave me I’m ready. Yeah.

Tim Harman 32:27
These are the sorts of things I wanted to hear because I wanted to hear about that mental game about burning the ships and just like, where your head’s at, when you’re when you’re when you have burned the ships and you’re just going after it like this. And so

Drew Scholtens 32:39
you don’t have to burn the ships.

Tim Harman 32:40
Yeah, you don’t have to. But I think when you’re raising a quarter million dollars and your investors are expecting you to get a product together, maybe you’re at that point

Drew Scholtens 32:51
not we know when your ambitions are large enough, you have to jump right I mean, there are some companies and ideas that that you can kind of slowly walk into especially an established market. That’s true, you could kind of fiddle with and fill your way into something. But when you’re trying to create something as large as ambitious as this is, I’m literally proposing a new market, right? This is a new market that I’m throwing out there, diversion of one we all recognize, and yet it doesn’t exist today. When you want something that big it, it takes in proportion to your ambition, that much of cost. And so you have to what are you willing to sacrifice? Right? This is an old, an old epic, what are you willing to give up to slay the dragon?

Tim Harman 33:26
For sure? Well, as we close our time, if you could think of maybe just a couple things, or if it’s just like one big thing, I don’t know, something to encourage or tell somebody that’s thinking about this. So somebody has just had this idea rolling around in their head for a while now. But they just can’t imagine burning the ships or doing anything remotely like you’re doing. Is there any encouragement that you could give to those folks?

Drew Scholtens 33:54
Yeah, so you don’t have to burn the ships today. The encouragement would be if there’s something you’re confident that this is a great idea. Everyday, take the baby steps, just take the baby steps until you’re comfortable with burning the ships. That term comes from Cortez. Earlier you said I know a little bit about Yes. So Cortez landed here. And he brought a small group of soldiers with him. And they were convinced that this was a terrible plan and that they should get back to Spain where they were safe and warm. And Cortez literally said, just burn the ships. So now we can’t go back. Right. This is a this is a strategy that he used that basically said, there’s only four there’s no back. And that that was a crazy decision at the time. But you could take the baby steps. If he got on the ship, they sailed the ship, they landed the ship, they figured out that they took all the baby steps and then it was Cortez, who was able to make the next jump after making all the baby steps. So what I would say if you had an idea that’s big and ambitious, is wake up today and figure out what you can do today to get one step closer and do enough of those until burning the ships doesn’t look scary. It looks like the only option and then you’re ready to jump in for me. It was negotiated my way out of Equifax and, and had prepared my house and prepared my friendships and prepared my finances. Those were all the baby steps I took to the moment where I was ready to make the it’s still scary. So I mean, I wake up every day, sure with a weight on me. But I also wake up every day excited, I was up at 5am this morning editing video. I wouldn’t, I wouldn’t replace that I wouldn’t give it up at this point. It’s like, I need that adrenaline rush of I’m afraid and therefore I’m excited. And therefore I wake up and work really hard. I’ve never worked harder in my life. But I didn’t do it all at once. You know, it was these this idea was a year old before I left even the corporate job and now it’s coming up on the first year anniversary of me leaving the corporate job. So now it’s two years into this process in the first year. I was testing the idea, talking to friends, throwing it out there picking names, getting my wife on board, you know, drip fed her. I don’t expect her to jump off a cliff tomorrow if I have a new idea to time to get her around to it. So you take the baby steps until ultimately it comes down to I can’t think of anything else I can do except burn the ships.

Tim Harman 36:03
Right? It would be interesting to hear directly from your wife about that mentality of supporting someone that’s doing what you’re doing. Yeah, I think that that would be a really interesting story to tell for sure. So who knows? Who knows? Who knows? Maybe I won’t have Dave or Josh here for a while longer because this Corona thing and maybe we’ll have Allison back. I can

Drew Scholtens 36:23
work on my Josh and Dave accent if you want. Yeah, right. Yeah, I know. Enough. Yeah.

Tim Harman 36:28
Well, Drew, thank you so much for coming on the show. And I would love to hear from our listeners. You guys chime in on the Facebook group. I would really like to hear your thoughts on this show. Because this is a little bit of a departure from our normal like DIY stuff. And but I still think it’s relevant. I really do because the, the thing we’re thinking through about You can, man.™ is it’s not just about DIY stuff, you know, that’s always gonna be our, you know, our go to we’re always going to be talking about fixing stuff right? But These kinds of topics are really interesting. And they bleed over into all kinds of other areas of our lives. And so I think that this was really interesting listening to Drew. Alright Drew, where can people find you?

Drew Scholtens 37:13
so LinkedIn is a great place to reach me on a more personal level. And then is the website, you can watch this kind of develop it and build it in real time, if you want. So those are the two places I would I would start off with and all my contacts there at LinkedIn if you’re if you’re intrigued about what I’m doing.

Tim Harman 37:31
Yes. And we’ll, can we put your LinkedIn link on our show notes? (You may.) Okay, well, we’ll do that. Then I’ll put that in the show notes so you guys can check that out. Guys, thanks so much for tuning in to another episode of the You can, man.™ podcast, be sure to check out our Facebook group page and Hey, take some time to leave us a review on Apple podcasts. We’ll catch you guys next time.

Transcribed by and then edited some. There may be mistakes. 🙂