How Badge chose retail and commerce as its entry vertical inside a horizontal wallet market | Eric Senn

Speaker A: You're dealing with three integrations into three platforms. They're very different.

Speaker B: Welcome back to another episode of Builders. As always, this show is brought to you by Frontlines IO, Silicon Valley's leading B2B podcast production studio. If you're bringing technology to market and want to learn from your peers, we have a library of more than 1200 interviews with Venture backed founders and marketers. Where they talk, all things go to market. Of course, if you want to launch your own podcast, we offer podcasts as a service to more than 80 tech startups. The idea there is very simple. You show up and host and we do everything else. Now, with all that said, let's jump in today's episode. Today our guest is Eric Sen, co founder and CEO of Badge. Eric, thanks for being here.

Speaker A: Thanks, Brett.

Speaker B: Looking forward to our conversation here. Let's talk about your journey. What were you doing before Badge and then why Badge? What made you decide to start it?

Speaker A: Yeah, so I've been in the early stage tech world for a long time. I love zero to one phase. And before Badge, I was working on another startup called Store. And I don't know if you know the company Shop My, but they've been wildly successful. I think they raised like, uh, close to $80 million from Bessemer last year. We built a very similar company to them a few years before them and they were able to kind of crack what we weren't able to solve and, you know, hit escape velocity. But we were working on very similar product. And one of the things that we did at Store was the consumer experience was an app. And as far as I know, Shopmy, the consumer experience was mobile web. And I think when we were building the mobile web just wasn't there from a UX perspective. And so we felt like we had to build this iOS Android app to create this really nice consumer experience. The problem with apps is they're super hard to get people to download. And I think that's increased over the past few years. And every company has one, every company asks you to download one. And they're hard to get people to download. They're hard to get people to retain once they have downloaded. So when we started winding that company down, I kind of went on a crusade and was looking for like a simpler interface that consumers could interact with businesses in. And I think a lot of people come into Apple Wallet and Google Wallet through payments, but I actually came in through the boarding pass. If you've ever taken a flight and added a boarding pass to your wallet, it's super Easy. You don't have to download the app. It's one click and it's in there. You pull up the SFO and it just magically pops up on your screen because it's geofenced. If there's any gate change information you get a push notification and it automatically changes. And I was like whoa, what is this technology and how can we use it for other use cases? So roundabout story but that's kind of how we got here.

Speaker B: First customer. Talk to us about the first customer, first big customer that you're able to land. Wow.

Speaker A: The first big customer is a little bit interesting because you know we really today we were almost solely focused on enterprise and they are slow moving businesses. But the first big customer we were able to land wasn't and we're really just focused on the US and North America and Europe today or in the UK today. But the first big customer was actually like European Walmart Care 4. Right. So if you've ever been to France, you've probably gone to a care for and shopped in there. It's their biggest grocery and convenience chain. And they reached out to us and they were kind of early adopters of the wallet and we powered their loyalty program and in wallet offers in Apple and Google Wallet.

Speaker B: Why do you think they gave you a chance for that first customer? If you think back to it, I

Speaker A: think it was a mandate coming from their leadership and I ah, think the other interesting thing about wallet adoption is it took off faster in Europe than it did in the United States and it certainly caught up in the US But I think they were a little bit more forward thinking than some of the companies here and we knew somebody over there through a mutual investor and I think we just got connected to them at the right time and it was, and it was a way we went.

Speaker B: When you reflect on your go to market journey, what would you say has been the biggest learning or if there's been any painful learnings, those are always the ones that our audience really likes to hear about.

Speaker A: Yeah, well I think you know when we started this company going back to kind of our problem statement, we saw all this potential in Apple Wallet and Google Wallet and we saw it as a dynamic surface. Right. I think most people think of it as a very static place today where you just, you have this digital representation of a physical card but we've made it programmable. Right. You can actually send updates to the wallet. You can change the design, you can uh, do real time balance updates, you can put links in there that link people to Apps or to buy things, to shop. And so, you know, we saw all this potential in there. The problem that we solve is that it's really hard for businesses to build in the wallets. Although the consumer experience is very easy and very simple. The business has to integrate into Apple, they have to integrate into Google. If you want coverage in Samsung, you have to integrate there. There's more wallets coming online and you're dealing with three integrations into three platforms. They're very different, they have different features, different schemas, different APIs. And so we just wanted to make it easier. We wanted to be kind of the on ramp to wallets, but we didn't know who we were building for. And I think that's always a problem when you start a company. You know, a lot of companies have a really clear ICP out of the gate and we didn't have that. We just knew we wanted to open up this technology to the world. And so when we were creating our go to market strategy, we just had to do a ton of discovery. We had great VCs early on that gave us the time and helped us to do that. But when you think about wallets, there's so many use cases. Loyalty cards, gift cards, credit cards, coupons, boarding passes, transit passes. And those can be applied across a number of different verticals. Retail and commerce, banking, sports and entertainment, travel and hospitality. And so we had to really go and talk to as many of these businesses as we could to figure out who was having this problem and how we could actually solve a forum and where we could add value. And when you think back to the airline industry, they were early adopters of the wallet with the boarding pass. But other industries have been slower, you know, and so we had to kind of navigate that and we had this big grid up on the wall. We called it our product market fit bingo card. And across the top we had all these verticals. Banking and retail and commerce and travel and hospitality. And then across the rows we had SMB Mid market enterprise. And we were just trying to go and put chips on that bingo card and figure out, you know, where we were going to go first. And I think where we landed was most of the use cases. And this is really our thesis, are commerce related. Uh, we believe wallet is the most valuable surface in commerce. Right. Wallets are kind of absorbing every consumer touchpoint. That's payments, loyalty, identity, access. And it's all converging in this piece of technology we carry in our pockets. And so we went to retail and commerce and a lot of those companies have big loyalty programs or gift card programs or coupon programs. And we saw that as low hanging fruit for us to be able to kind of digitize and put into the wallet and make much more dynamic.

Speaker B: This show is brought to you by Frontlines Media, a podcast production studio that helps B2B founders launch, manage and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit Frontlines I.O. podcast. Now back to today's episode. Why do you think airlines were, uh, so quick to adopt? If I just think about the. I was talking about this with someone the other day, like, I think 10 years ago, 15 years ago, I had this like, fantasy that flying was going to be like, way better in the future. And like, it's actually gotten worse. No offense to the airlines, but it doesn't seem like they spend a lot of time thinking about how to make the process easier for us. So was it in their best interest? Like, is that, is that why they did it?

Speaker A: You know, it's a really good question. I think the airlines, they were solving two things. I think, number one, you know, a lot of times you just show up at the counter and they would print you a ticket and you know, that printer costs money. The paper they printed on costs money. But then I think, you know, with security lines and uh, security processes, they saw this as a more secure way to actually check somebody in for their flight. So if you have a paper ticket, you can give that to another person after security, or you could, uh, take a photo of it and send it to somebody. But inside the wallet, you can actually rotate barcodes, right? And so you might not know this, but inside your wallet. A lot of ticketing companies, they update the barcode every few minutes. And so even if you do try to screen capture it and send it to somebody, it shouldn't work, right? So I think it was just a more secure way. And there's probably a cost cutting measure on all the printing.

Speaker B: If I look at the messaging, I know the core messaging there, build, deploy, measure, CX experiences. How do you measure? And talk to us about the importance of emphasizing that in your messaging.

Speaker A: So, I mean, I think one of the things that we saw when we first we were looking for a simpler way for businesses to interact with consumers when we got into the Apple and Google API docs. We were blown away by a lot of the functionality that was in there that companies weren't using. And so the geofencing, the ability to send a push notification, the ability to put links inside the wallet. So we did see that as a truly interactive surface. But not every use case in the wallet is a marketing one or a customer engagement one. Some of them are access, some of them are identity based. Right. And so we had to decide what kind of company we wanted to be. Did we want to be a customer engagement platform that focused on the wallet, or did we want to be the true infrastructure layer for wallets? And I think we saw that as a much bigger business opportunity. Right. To be able to be the piping that sits between a business and Apple, Google, Samsung and any other wallets.

Speaker B: Right.

Speaker A: And we wanted to build that infrastructure layer similar to like a stripe built for payment processing or Twilio built for messaging. We wanted to be that piping that kind of enables companies to manage the full lifecycle of any wallet Surface. Right. So that's issuing and provisioning, that's personalization, that's the messaging, the updating, the measuring, the optimization, the invalidating, the auditing, all of that is happening behind the scenes in that tiny little loyalty card or credit card or gift card or whatever it is inside your wallet. And so those are all kind of like product lines within our infrastructure.

Speaker B: Right.

Speaker A: And different companies that are provisioning or issuing different wallet use cases, use different parts of those or use certain parts of those more than others. Right. A, uh, loyalty company may use the messaging and the geofencing to draw people to stores, whereas a ticketing company is really going to be about the authentication and the invalidation. So it just depends on the business. But as an infrastructure layer, those are all components of the product.

Speaker B: How much of your time and effort and energy do you try to spend on evangelizing this idea and this concept and then capturing the demand after you do that, versus just capturing existing demand that's out there currently in the market?

Speaker A: It's a really good question. And I think when we had to do a ton of education about the wallet, I think outside of boarding passes and credit cards, people didn't know what else was possible in there. I think the default perception is the wallet is a static place. And so if you go to our website and you see our hero video, we wanted to invest in video because video shows motion and video shows that the wallet is dynamic and it can update in real time. And so we really had to do a ton of education for the first couple years of this company and I think we were able to find some early customers that believed in the vision and to get those first couple case studies that we could then evangelize. But I think over the past couple years we've seen that shift quite a bit. We've seen the market come up to meet us, we've seen a lot of our leads switch from outbound to inbound. And I think, you know, we've seen more investment into the wallet from companies like Apple and Google. So yeah, it's during the early days we had to do a lot of teaching about the wallet but now thankfully we don't have to do as much.

Speaker B: How have you seen the marketing program shift then? I feel like that's one thing if you have to go out uh, and create demand to capture. And then it's a totally different thing if it's all about going and capturing that demand. And I think when there's existing demand to be captured kind of by nature, there'll be others trying to capture that demand as well. So how have you seen just the general marketing strategy change and evolve?

Speaker A: We're a horizontal fintech, right? And so part of the go to market strategy is focus, right. We can't just go after every single vertical. We really had to focus on the verticals that needed support for the wallet now versus companies that thought it wasn't nice to have. And so we actually created like an internal, we call it the Woo score, the wallet urgency score. And we have like a social listening project that pings us in Slack when you know, we see a uh, market signal that says hey, this company may be looking for a wallet solution. So it's really been about like finding the companies that need, need wallet now. And that's definitely led to some interesting marketing strategies versus you know, we don't run a bunch of ads or anything like that. It's mostly like highly focused account based marketing and that's been what's most successful for us.

Speaker B: Any lessons that have been learned from building out the marketing team, building out the go to market team?

Speaker A: Yeah, I mean I think founder sales are super important. I'm very involved with the sales team but I think you gotta build out a team that fits your icp. Right. And your go to market strategy has to fit that icp. And we had to go through that product market fit bingo card and that discovery process to figure out who our ICP was before we can even hire that team. Right. And we go after some of the biggest businesses in the world. We work with some of the biggest businesses in the world. So once we really said, hey, this is our icp, this is where we're driving value, this is where we're seeing demand. Then we went and hired the team and we went and hired the first two sales guys and one came from the events space. He was at Splash. They were acquired by Cvent, like the day he started working here. So he kind of, you know, had that event ticketing and that size of the wallet. And he also had a strong SaaS background. And then we ended up bringing in a head of revenue and he came from Cardlytics and Amex. So, you know, both of these guys have enterprise experience, very senior, have been through acquisitions, know how to talk to enterprise clients, have the patience to deal with the long sales cycles. And I think it's critical to make sure you know who that ICP is before you hire the team. Otherwise you might end up with enterprise guys when you really have a, uh, more of a plg motion, you know, and that's the last thing you want. This show is brought to you by the global Talent company, a marketing leader's best friend. In these times of budget cuts and efficient growth, we help marketing leaders find, hire, vet and manage amazing marketing talent for 50 to 70% less than their US and European counterparts. To book a free consultation, visit globaltalent.co

Speaker B: I want to ask you a little bit about naming and I want to ask you for some advice. So, a, uh, company that I'm an investor in, they're, uh, getting ready to go through a name change and I've been part of the process. They're debating names. And I think, you know, on one hand you want something that's totally unique. I think the downside of that is, I mean, there's not a lot of unique names left. And then B, if it's, you know, hard to say, hard to remember, then it's, you know, not super, super effective. When I look at your names store badge, you've gone with very general names. They're very memorable names. But the downside, if you think about it, and I've heard people talk about this with names like a bar test, you know, if you were to meet someone at a bar, tell them the name of your company, the next day they wake up, they're like, oh, God, what was that company called? Maybe they'll have a hard time remembering it for you. How do you think about naming? What's your process? And you've clearly decided to go with simple names that are very, very common words. Talk to us about your name strategy.

Speaker A: Naming is hard and I do like simple one syllable names. It's kind of funny that you picked up on that. The downside of that is badge.com, which is available is a million dollars. And so, you know, I think there's naming and then there's, you know, can you actually get the URL? And for us our ICP is enterprise and there's some regulated, you know, companies that can't even go to a website that's not a dot com. And so for us, we, you know, we chose the name badge for a number of reasons. I think we were going back and forth between a couple different names and again, we really started in loyalty and commerce, but we wanted a name that grew, grew that would grow with our tam. And as we expanded into different verticals and so the first couple of use cases we were really solving were membership and loyalty. And so we were coming up with these really silly commercy direct to consumer names and they just didn't feel scalable. And so we wanted something that was secure, it had a little bit of class to it. And our head of product is the one that actually came up with the name. And it wasn't, you know, badge you think about like a badge you scan into an event or you scan into an office. But we actually came up with it, uh, when we were thinking about loyalty as a badge of belonging. Right? If you're a member of a loyalty program or a membership program, then your loyalty card is a badge of belonging. And so that's how we kind of came up with it. And once he said badge, we were like, yeah, that's great. And I think when we started building the company, we didn't even really think about like, you know, who we wanted to be when we grew up. But at Series A, Stripe invested, right? And you think about their name, it's very similar, right? And so I think one piece of advice I would have is like, you know, they say dress for the job you want. If you're coming up with a name like look at who you want to be when you grow up. If you want to be like, like Stripe and you want to be an infrastructure company, or you want to be like Twilio and you want to be an infrastructure infrastructure messaging company, then you know, those guys got it right for a number of reasons and marketing is certainly one of them. And so I would look to those types of companies that you look up to.

Speaker B: Final question for you. Let's talk about the big picture here. So we can go out 3 years, 5 years, 10 years, however far out you want to go. What's the big picture vision for everything that you and the team are building?

Speaker A: Yeah, I mean, I think we're in the early stages of digital wallets. We're still in what I call the digitization phase where we're simply taking things in our physical wallets, digitizing them and putting them in digital wallets. And throughout that process, like think about, you know, you have a punch loyalty card that you keep in your wallet and you go to the coffee shop and they punch it. Now that goes in the digital wallet and it's a direct line to message you. You can tap to pay. And when you tap to pay, your identity data flows through to the pos, so you know, you don't have to enter your phone number like you do at the grocery all the time. So I think we're still in the early innings and I think when I think about where the wallet is going, I think Apple and Google, who we work very closely with, and Samsung, their goal is to eradicate the physical wallet. I think, you know, you talked about your kids and we're getting ready to have our first child and I don't even know if our kids will know about these pieces of leather we used to carry around in our pocket. And so I think that's where Apple and Google are going. And when those two companies are marching in the same direction, they typically don't miss again. We're just trying to be that on ramp and help companies use this incredible piece of technology. And I do think over the next five years you will see the wallet absorb every consumer touchpoint. All payments will be made through the wallet. Loyalty will be all through the wallet, gift cards, identity. You know, I just went to TSA and used my Colorado driver's license for the first time and was able to get in, you know, your passport access when you go to a ticket. I think all of that is kind of converging into this one piece of technology inside our phones. So I think we're in the early innings. You'll see more of it. And I do think you'll see the wallet, which today is mostly on uh, the mobile device, extend out into these technology ecosystems. And I think that's Google's vision is the wallet is your, where your identity lives. But that identity can proliferate into Gemini, into Gmail, into gcal. And so I think that's kind of the next phase that it will be connected into everything you do.

Speaker B: Amazing. I love it. And Eric, good luck with the baby. I have a two year old. It's a lot of work, so wish you well.

Speaker A: I appreciate that, man.

Speaker B: Where should we send people if they want to follow along? Because it's not badge.com at least not badge.com today. Where should we send them?

Speaker A: That's right. That's right. And if you own badge.com, please go to tribadge.com and, uh, let me know if we can negotiate a price less than a million. But yeah, tribadge.com t, r y b a d g e dot com and please feel free to drop us a note on the website or on LinkedIn if you're thinking about wallets and, uh, you need a wallet strategy, we'd love to help. Love it.

Speaker B: Eric, thanks so much. Well, that's all for for today's episode of Builders, brought to you by the Frontlines. If you want more amazing content like this, visit Frontlines IO, where you'll find a library of more than 1500 interviews with founders, marketers and other GTM leaders, where we unpack the tactical lessons from their journey. And of course, as always, if you do want to launch your own podcast, we'd love to have a conversation with you. Visit Frontlines IO Podcasts as a service. Mention that you listen, mention you love the show, and then we'll give you a 10% discount. Thanks for listening. We'll catch you in the next episode.