Voiceover: You are listening to Samsara. Be inspired by NO-CODE superheroes.
Moderator: Hello, listeners. We have an exciting person with us today. We have Husayn from Onfido all the way from the Valley talking to us about his journey, what it’s like to be in such an exciting, fast-growing start-up and how exactly can that help all of us. Husayn, thank you so much for finding the time. Welcome to Samsara.
Husayn Kassai: It’s good to be on.
Moderator: Well, first of all, Husayn, I know that a lot of us already know you but it would be amazing if you share with us who you are and what you do in this ecosystem.
Husayn Kassai: Of course. So, I am one of the three co-founders and the CEO at Onfido. We started the company in 2012, eight years ago. Onfido essentially digitally proves a person’s real identity online. So, we power about 1500 businesses and that’s, say, you own an online bank, when your customers are registering, for example, at the initial stages of downloading the app they’d be asked to take a photo of their ID such as a driving licence and a selfie video and then behind the scenes, we’re checking that your ID is genuine and not fake and then we’re matching your face with the photo on the ID. Machine learning is a key part of making sure it’s all done effectively. The whole intention is essentially to create this open ecosystem where everyone is able to easily and securely approve their real identity.
Moderator: Wow. Obviously this is a world-changing idea which is very clear and you thought about in 2012 when it wasn’t such a big deal. What’s the story here, Husayn? How did you come to think about this?
Husayn Kassai: So, I actually started thinking about it when I turned ten, almost twenty years ago. That was when my parents moved from Iran to the UK. It was quite clear to me that there was a problem with the whole identity aspect of this because it just took them a few months to be able to open a bank account and register and essentially rent in their own name. Ten years later when they moved to California, they went through exactly the same thing. So, I realised that the current ecosystem is underpinned by credit bureaus which are centralised databases and logs of everyone’s dates of birth, names and address and, in the States, we have your SSN and so on. They’ve fulfilled an important role historically but given all the data breaches, fraudsters, bad actors have very easy access to the same data and therefore it’s lost its currency in offering security. So, the more we looked, myself and my two co-founders, during our studies at university, at how broken the identity system was and how it was getting worse, for us it was very clear that moving forward technology would be needed to make sure it was done in a much more user-friendly and, more importantly, a more secure way.
Moderator: That’s amazing. I couldn’t agree more. I didn’t have your idea at all, but I couldn’t agree more. You know, as a person from an Eastern economy, I’m, like, tired of proving my identity everywhere and I hope you solve the long queue at the passport counters in every airport someday because that will be absolutely amazing.
Husayn Kassai: Yes. Well, in the States, if you use Clear, for example, as you go through most of the airports, only for domestic flights currently, as a Clear customer you essentially go from kerb to gate in a very seamless way. There are about five touchpoints where historically you’ve had to show your identity and now you don’t need to because Clear would let you do it, whether it’s dropping your bag off, or security gates, then the lounge, then the gate and so on. So, airport is an interesting use case and Clear are our partners.
Moderator: That’s amazing. I mean, now that’s something even my mum will appreciate I can tell you that, easy to understand. Husayn, how far are we from a world where, basically, identity becomes a seamless entity almost everywhere all the time at all times in our lives. Like, it’s not something you think about. You walk around and your identity is naturally taken care of, embedded in the environmental, like, tools and sensors and (mw 04.00). Are we, like, two years, five years, ten years? How far away are we from that world?
Husayn Kassai: Our hope is within the next five years. So, in some use cases, we’ve just talked about airports, for instance, you have pockets of that seamless activity. Your question is more around when is everywhere, and it’s across all the use cases, so the hope is that it can be within the next five years. Part of it is technology drivers and the correct building blocks coming together which they, in large part, now have. There is also a behavioural side to this, user journeys and so on. There’s a regulatory component of it. Obviously, through airports it’s DHS, that is the Department for Homeland Security, that needs to approve processes, for instance. If it’s a financial service, you have the Financial Service Regulators that need to be okay with it. That’s accelerating quite rapidly. More and more user services are now being completely approved by regulators, not necessarily just approved but in some ways endorsed, because it’s increasing digital activity, access to these services, and it has all those benefits. Geographically, China in some ways is ahead of most other countries on this whether it’s WeChat or, on financial, if you’re using, let’s say, Alipay you can quite easily access many services and make payments and do a whole host of other things because there is an identity infrastructure there developed in China where there’s this relatively easy access, you know, using a WeChat app, you can easily access services and pay and so on. It’s done in a relatively secure way. So, it’s not that easy for fraudsters to cheat the system but it has a downside of zero privacy, and that’s the main challenge. When it’s a centralised, say, government authority that’s running this program, you have those risk. So, our intention in many ways is to replicate that, but for the rest of the World, but having privacy embedded at the heart of it where there is no organisation, whether it’s a government authority or private company, that would have a centralised repository of everyone’s data just because it couldn’t work that way and it wouldn’t be secure nor privacy-conscious.
Moderator: Does that worry you? Do you ever think that there is some way this could go wrong and you could take proactive steps? What do you think about that, Husayn?
Husayn Kassai: Yes. There are very many ways it can go wrong and it, kind of, has done over the last decades and even before. Identity has always been needed and ultimately proving a person is who they claim to be. There are different layers to this. You have your social identity which, in some ways, Facebook has standardised, your likes, dislikes and so on. You have your professional identity which LinkedIn has standardised, your professional background, academic achievements and so on. Now, our focus is on your real identity or your legal identity, standardizing your date of birth, name and address for you to signal that so that you’re compliant if there’s a financial transaction or something similar. The ways that it can go wrong, one is that if it’s not effective, and that means it’s easy for fraudsters to cheat it, and that’s why the move away from the credit bureaus is accelerating in large part because third approach of showing your government ID and facial biometrics is more secure. Fraudsters cheating the systems is actually a significantly big problem. The United Nations estimates that up to 5% of the World GDP, which is almost two trillion dollars is laundered money and 99% of that goes undetected. This fraud and security industry, as much as we like to celebrate ourselves and give each other awards, has a 99% failure rate which is a bad metric by any measure, so there’s a long way to go on the fraud side. On the convenience side, it could fail if it has too much friction because consumers, broadly speaking, don’t like to think too much. They like to have it as convenient as possible. You have approaches such as knowledge-based questions and so on, you know, what is the third digit of your last utility bill, things of that nature or, you know, you try to sign in to your email, you need to pick out which of these photos does it have a bus and which one doesn’t have a bus. That’s a bit bad on a convenience side. Lastly, it’s the third is around privacy. Having no centralised authority holding that much power and holding everyone’s data because centralised databases ultimately, in the long run, are much more likely to be breached and if it’s breached then the whole integrity of the system goes. So, you have to combine all these three. You can fail across security, convenience and privacy, and that’s in large part what we are focusing on ensuring that it doesn’t. If there’s a fourth one that is, in some ways, like, a consequence of this, it’s access across the World so it’s not an exclusive approach. Again, the credit bureaus currently only cover half the World’s adult population. There are more than two billion adults in the World that are not on a credit bureau and therefore are excluded from basic things such as financial services. So, those inclusion components and access more broadly is also an area where failure is a possibility and that’s why it needs to be done well.
Moderator: It looks like you’ve already thought a lot about it. I’m pretty sure you get this question a lot, so let’s switch gears to a little bit more interesting thing, I’m sure you get this everywhere, okay, this is exciting, this is going to make our lives great but are you worried? You probably do this pitch all the time. So, let’s switch gears a little bit. I think one thing that I’m really excited to know is about milestones you’ve reached. I know that Onfido has done really well. You guys have raised list (ph 09.34) lately. I think you raised, what, 100 million?
Husayn Kassai: Yes. That’s our latest round. Yes.
Moderator: Yes, that was, what, Series C?
Husayn Kassai: C, correct.
Moderator: Okay. Great. Well, congratulations. That’s a fabulous feat and that too, you know, at this time. I mean, it was very well timed and very well done. I know that you probably hear this all the time before you started and while you are doing this, that this is all very hard. If there (TC 10.00) is one takeaway from this process of doing multiple fundraising and doing various pitches and going through the mental trauma and agony, people see your success but I’m pretty sure they don’t see the amount of failures, rejections and agony that you go through to do that. You handle all of that by yourself and you go back again and do it, you know, like all entrepreneurs, the part that they don’t see, all of that must have given rise to lessons. You’ve taken away some things. What would you share with your entrepreneur friends, the greater community, maybe quite a lot of them have tuned in and they’re listening to you right now? What would you tell them, some messages from your journey of fundraising? What would you say? You’ve obviously done really well so the best person to take that message from.
Husayn Kassai: There are many things that could be said. One thing is around if you’re in a fortunate position where you have a number of options, it’s starting with those relationships as early as possible. Then if you ask for small favours, you know, if you’re a B2B company and you ask for an introduction to a portfolio company of an investor and see if they follow through and therefore work hard to converting that customer and impressing them so that when the time comes for you to go and raise investments, a, they would know that you, kind of, follow through and b, you would be able to get a reference from their portfolio and see most importantly on your side. You can be quite sure if an investor is helping you even before investing then they’re very likely to help you after investing too. So, that’s one thing that I think is a practice that more and more founders should be using. You’re naturally presenting for investments but the people you’re presenting to sit on the board of dozens of companies sometimes or at least have strong relations to dozens of companies that could be potential clients. So, I’ve, kind of, always seen it as half investment, half sales opportunity and that way, you know, out of every 50 investor meetings you’re only going to get one at the end of it but the other 49 would have been mutually beneficial because if you believe in your product then, kind of, that investor needs to in some ways believe in it so that they can introduce it to their portfolio. That portfolio would have a better service too. If there is another one, it’s perhaps to work as hard as possible to get introduced to a partner and a decision-maker. You have early-stage and later-stage if I divide it in that way in, sort of, a crude way. Early-stage fundamentally are buying into a vision and, kind of, the team as well as, you know, seeing that the market is big enough and so on. It’s mostly unknown future and it’s just, like, confidence in a person or a team and them being able to execute on something. Later-stages ought to be a bit easier because there will be a track record and metrics and things that you can’t demonstrate that you know you are strong on execution, but at the early-stage, you wouldn’t be able to as much. So, when you’re essentially selling a vision and a confidence in something that you are suggesting will happen in the future, it’s hard to do that with more junior team members at an investment firm. You really need a partner or a decision-maker to buy that vision. In my view, what then happens is the partner is sold on an idea and then the rest of the work that happens thereafter is, kind of, justifying that as opposed to a traditional approach which might be applying online, going and speaking with junior members, associates and others and then trying to work your way up to a partner. I’m not saying that’s not okay. I’m not saying that doesn’t work at all, but in my experience, it’s much better at the earlier stage just to go directly to a partner, see if you can find that real champion and if you do, invest more time with that firm.
Moderator: I couldn’t agree more. We’ve obviously raised far less than you but I have taken some advice from you I think last year when we were raising and it was good advice. I think I completely resonate with what you are saying. It’s, kind of, hard to get a buy-in at a stage when it’s still largely about the vision and the future and the potential when the person isn’t a decision-maker. So, I think that’s really, really good advice. Husayn, I know that a lot of our connection and our common things and the fact that I know about you is because we went to Oxford. So, tell us a little bit about where you studied, what you did before and where you’re from originally. Do you think all of this played some role in what you’re doing or was your entrepreneurial path one of those where, you know, one, kind of, picks up something that was completely orthogonal to what they did before or their life experience before, or do you think in some way they were connected? Tell us a bit about your story? Who is this guy behind this business?
Husayn Kassai: I think in some ways everything is connected on some level. So, my personal experience, I’m mixed race. My father is Iranian, my mother is English, so growing up for the first ten years I was based in Iran. I remember having a strong interest in how the market worked. I’m talking about, like, your basic, traditional markets like fruit markets where they stand things and traditional bazaars and things. I was, kind of, always interested in that and just couldn’t spend enough time understanding and learning as much as possible just from an early aged. Then when we moved to the UK at the age of 12 I started my first business which was selling music on eBay. I later started a few smaller things of that nature. After a while, I started working in retail. It was Marks and Spencers just, kind of, like, while I was in the States. I did a few things, you know, had traded some shares on the stock market and just started to develop and formulate a view as to where value comes from, what a competitive moat looks like because my eBay business did well for the first few months and then before you know it you have a competitor coming in undercutting you. So, I was, kind of, fortunate in learning some of those lessons early on. Then, during my university, I guess, studies, I read economics and management, having gone in more interested in economics and having come out not interested in it at all and very much more interested in at least the economics of developing countries and strategy as well as management. Having decided, given the student societies I was involved with, and there were quite a few of them, but the last one was the Oxford Entrepreneur’s Society where, along with one of my co-founders, we hosted many events, we learned quite a bit, and I just felt like there were these new technological building blocks that are now available and that these are the opportunities that are not fully grasped by those who are already, sort of, in large companies and running and doing what they’re doing. You’re classic, like, innovator’s dilemma became familiar to me. So, that’s when I saw, given my, sort of, history of feeling how broken the identity process was and getting worse, I saw, kind of, this chance to be able to solve it and solve it well. There is one other point around is there anything specific about, you know, having lived in different countries and that kind of upbringing bring about more of an entrepreneurial spirit. I don’t know for sure. I have read, and the statistic suggest, there may be some connection. I think the underlying root of that is being comfortable in an uncomfortable or uncertain setting. So, as a child if you go from one school to another or one country to another and so on you become more familiar with uncertainty. I know times have changed and over a long period, it just becomes normal to you. It has been written about, called cross-cultural kids, and things of that nature. I think you don’t have to, by any means, have that in order to be an entrepreneur but if you are setting up a company in an unsettled environment where there is uncertainty, you need to be comfortable in that uncertainty. So, one way of naturally being used to that is perhaps if you’ve gone through a number of different schools and moved countries quite a bit.
Moderator: I agree. I agree. Definitely. You know, in my own journey, that’s true. A lot of people, obviously, given my background and where I’m from, were not very comfortable with the career decisions I was making because most of their fear was how are you actually going to deal with the mindset? This is so very drastically different from how you’ve been taught to think, or been brought up and also because of my STEM background and my family. You know, we try to seek high-certainty, accuracy and precision and as much data as you can before you make any decisions, especially big ones, which is the exact opposite of how entrepreneurship works. You have limited data and you’re highly uncertain about things but you’ve still got to take the plunge. I think I definitely attribute, like yourself, well at least in my case for sure, I can’t speak for everybody, that the fact that I’ve moved so much and I’ve lived in so many different places and been exposed to so many different cultures and languages and the East and the West and the Middle East have all played so much into my comfort with various types of decision making and being comfortable with uncertainty. The other word for that is probably failure, uncertainty also means that there are a large number of times you will fail because of incomplete data. So, I think that what you’re saying is extremely valuable. Husayn, tell us a bit about what you do when you’re not working. I’m pretty sure that’s rare. All entrepreneurs work very hard. Especially given your results, there is no doubt you are doing that as well. I know that you live in a very beautiful part of the World. How long have you been there on the West Coast, five years or six years now?
Husayn Kassai: So, my parents moved around twelve years ago and it’s more or less been, even before the company, it was the holidays. More recently with the company, it’s trying to split my time 50/50 between (TC 20.00) London where we’re headquartered and the States. So, as a team of about 400, the majority are still in London and we have a growing number out in the States, East Coast and West Coast. On what I do, I think, well, as for, like, working hard, the whole startup thing, it should be hard. There are early stages and, again, late stages. In the late stages, if you want to get to a scalable state and, more accurately, like, a sustainable state, you need to have balance and, kind of, balance is necessary in everything. If you really believe that this is a three- or four-year gig then yes, maybe you can work around the clock. If you are in it for, like, a fifteen to 25 year period which is our mindsets, it needs to be sustainable. So, I actually don’t necessarily think that I overwork in the sense that it’s five full days a week and, you know, I’m talking, like, 8:00 am to 7:00 or 8:00 pm, full days. Usually half a day on a weekend, four or five hours sometimes, usually some of the things that just need some thinking time or no time pressure, you know, it can be open-ended kind of things.The rest, like, one full day on the weekend off and usually another half a day off as well. Travelling isn’t just one of my favourite things to do. I’ve read that just entrepreneurs generally like travelling and camping especially, whether that’s because you fully switch off from the Internet and get back in touch with nature, and things of that nature help. Whatever activity it is that helps you as soon as and quickly as possible get to a state of stillness or ability to not have a cluttered mind, and for me that is what is usually, like, the most refreshing. I am quite selective. I went through a period where, you know, I would catch up on the news. I would read this and read that and see what’s happening on Twitter. It’s been about two years since I’ve more or less switched off. I’d rather spend a few hours on a weekend reading that’s got substance and, like, analysis and something deep as opposed to, you know, every few hours checking out what’s on Twitter. You could think of that as breadth whereas I, two years ago, decided to cut off all of that, there’s, like, an infomania syndrome as you may have heard, to spend more focused time on things I like, I’m basically interested in. I think that has helped a lot.
Moderator: That’s really good advice because, you know, there are a lot of us who often lose balance. It evens happens to me. You know, where we’re riding the information wave and then you go over the top. You don’t know how far you’ve swum out into the sea and then it’s hard to get back to the shore and wave after wave hits you. That’s really the experience. I mean, I try to bring this analogy because I’m really close to the ocean and everything is about water for me eventually. So, I see what you are saying.
Husayn Kassai: I categorise it into two parts. One is, if it’s new, the question is, like, ‘Will this be interesting for me next week?’ If the answer is, ‘No,’ then there’s little value in, like, reading it because you’re just more or less reading it so that you have a topic of conversation over lunch or something like that. The second part is, like, ‘Is this entertainment? Is this like a good series on TV?’ whether that’s, like, pure leisure or, like, entertainment. What we, kind of, have is a little bit of a mix in the middle which is increasingly occupying mind space which is news that has been, sort of, glamorised and it’s, kind of, news but it’s actually mostly entertainment and we feel, like, ‘Hey, you know, I’m making progress because I’m learning something,’ when, in fact, you’re not. That’s occupying your mind where what I see is, like, more and more of our time, whereas the actual value in it is very, very little. The value comes from the other two ends of the spectrum. One side is, like, some deep thoughts and some substance and, like, a proper essay article, whatever may be, or the other angle which is actually pure entertainment, not this mix in the middle. Usually, you know, kind of, like, whether it’s sometimes on Twitter or more often it’s Cable news, it is addictive with very little value.
Moderator: No. No. Absolutely true. I also feel that there’s a lot of addictive elements to that, you know, it’s, like, small triggers constantly in your brain. I was talking to a molecular biologist some time ago and he happened to mention that it appears that the centres of the brain that actually respond to these small trinkets of news floating into our radar all the time and we respond to them are not necessarily very different from the centres that accurate when you feed the brain a sugar rush or when you actually have cocaine, it’s the same centre that triggers. It wants more and more. It gets into a repeatable loop. The brain is exhausted. All the energy is gone but it’s still caught in that unconscious loop where it wants more and it’s in a circular loop. Those synapses keep firing for a very long time. If we keep on doing it for a very long time and don’t retreat back and take the steps that you’re taking, this gentleman, his entire team researching on it, was actually sharing with me that it can result in long-term attention deficiency, not just in children but also adults, where you’re incapable of concentrating and finding nourishment in things of value that you’re building or creating or are interested in because it takes a long time for you to get back. Kind of, the same as addiction, like therapy, you then need to retrain yourselves to get back to having depth and focus. So, what you’re saying has a real biological basis to it and I agree. Husayn, tell us a bit about your future plans. How is Onfido growing right now and what do you guys plan to do next? What’s the next exciting milestone? You’ve raised 100 million, you’ve built this great company, you’ve been in the West Coast for a while, built a decent brand for you guys. What are you doing next? I mean, I know you want to conquer the World, but more specifics please, what are you guys up to?
Husayn Kassai: So, as far as growth is, just essentially just to hold to continuing to double every year. Geographically, in our view, less than 1% of the market has come to fruition and there’s 99% yet to come. So, it’s basically being sufficiently resourced and ready and distributed in the right places globally to be able to have, sort of, the privilege of working with customers in those markets. Broadly though, broader than that, from a company culture perspective I think once you set your goals and once there’s a strong product-market fit and it’s organically improving which is, like, a benefit of the machine learning approach, then it’s not to lose the essence of what made it all possible which is where the value comes from which is fundamentally the team and the culture. So, it’s increasingly spending time and ensuring that that doesn’t go away, nor does it become any less special. That is what’s going to take quite a bit of my time. I also know that there are not just new geographies but also new use cases. So, front of mind, given COVID-19 is voting, for example. This should be done digitally in our view. It should have been digital a while back, and a whole host of other activities. We’re moving towards cashless societies in more emerging markets especially where cash is still quite prevalent and that has a hygiene consequence now, right. Equally, when you’re accessing a building or in a train station or a hotel and so on, there are touchpads and things like that which again have hygiene consequences. Just working on some of these newer use cases of the future, we’re starting early, which is something that I find quite interesting.
Moderator: Amazing. Since you brought up COVID, has COVID impacted your work, your business, positively, negatively, internal culture-wise, anything? How have you been impacted?
Husayn Kassai: So, we have been. So, our volumes are greater than what we had even forecast and, as you’ve seen, all the infrastructure companies, whether that’s communications like what we’re using now or anything around payments, for instance, obviously digital payments. Thirdly ours is we’re essentially remote identity verification in an increasingly remote working World so that in the existing use cases, the volumes are increasing externally. Internally, we had 10% of the team permanently working remotely. Now we have 100% permanently working remotely. We’re adjusting to that. So, we’re, kind of, fortunate as I’m sure most tech companies are in that the agile way of working is, kind of, in most of our DNA to begin with. So, our transition has been relatively smooth but as we are adjusting for, like, how long this is going to last, we’re putting more and more things in place to try to replicate all of the benefits that you would have being in a, sort of, closed office space together.
Moderator: Yes. Okay. I think we’re almost at the end of the show and I think we’ve learned some great things from you about fundraising tips, about deep work, about being able to take time off, long-term strategy, the future that you’re looking forward to and how you’ve managed the COVID transition inside your company, your visions for the future. I think my last thing here is a message from you. You’re today in a position where people actually would take your message very seriously. If there is some future trend you’re worried about or something you’re really excited about or something people aren’t paying attention to, you have an audience today that will listen. I know thousands of people have tuned into our podcast today to listen to you, startup aspirants, tons of entrepreneurs and a lot of investment communities, even corporates, (TC 30.00) if you could pass on a message with or without your work, inside or outside what you’re on, something that you would like to share as a person, this is what Husayn would like to say, what sort of a message would you like to bring their attention to?
Husayn Kassai: Well, it’s probably hard to just get it into one, but I will. If I had more, the main concern is autonomous warfare, specifically with drones but that’s not a note you want to end on. If there is a tool or a category that I think is going to, in the next ten years, become a lot more commonplace, not just that it could but it should, is anything around deliberative democracy. You can find across the World in increasing numbers, not just pockets of tension, but growing masses of frustration with the status quo and how things are working. Part of it is, in my view, like, them being excluded from the decision-making process beyond just, you know, a vote every four or five years. There are a great number of tools that are already, sort of, out and the hope is that they will increase whether it’s Loomio or Poll for IS (ph 31.15) and so on. You can look at, in Taiwan for example, there’s Taiwan where there’s essentially a deliberative democracy approach so that you can crowdsource how local laws are made. Then, because the community or at least the proportion of the community, who want to be engaged are engaged, not only do you get into much better outcomes but it rebuilds trust in that there’s a disconnect between those who rule and make important decisions not being trusted and increasingly being disconnected from those they are supposed to represent. That isn’t healthy and nor is it sustainable. This will get to a breaking point. The role that technology could play is developing tools, specifically deliberative democracy tools, to overcome it, so this is an area that I’m looking forward to observing in the next five to ten years.
Moderator: Well, you speak to a lot of our hearts when you say that. I’m in the UK and you’re in the US, two countries that have seen it live, so I couldn’t agree more, absolutely. I hope that we move towards more deliberative democracy and your dream gets fulfilled as well, that in five years time, I and my mum don’t have to stand in a six-hour queue after an eighteen-hour flight to get into somewhere. So, on that note, Husayn, thank you so much for your time, congratulations on all the terrific progress you’ve made. I know that all of this has required a lot more planning and sacrifices and hard work than people imagine and I hope that you continue to do that and make all of us proud and give us a lot of hopes that it is possible to be such a trailblazer. Congratulations and thank you so much.
Husayn Kassai: No. It was great to be on. Thank you and stay safe all.
Moderator: Everyone, stay tuned to Samsara for exciting new people that are coming our way next week.