16 Feb February 19, 2020 – Trust & Will Cody Barbo and Econ Mastery Randy Epping
You have to get people dialed in on the vision and the mission
of the company. We have to have a shared purpose that we
all can get behind every single day.
Cody Barbo, founder and CEO of Trust and Will a TurboTax like online platform for estate planning. Cody has 11 employees, and his company has attracted a lot of investment, 2.2M in seed funding and they closed their Series A round in the last week of December with another 6M. Cody went through Techstars, lined up partnerships with MassMutual, Policygenius, and completed the first electronic Will in history! Since then they have helped tens of thousands of Americans plan their estate. Prior to Trust & Will, he served as Founder & CEO of Industry, a ‘LinkedIn’ for the service and hospitality industry. Cody sits on the San Diego State University Alumni Board of Advisors.
Randy Charles Epping – Author of The New World Economy: A Beginner’s Guide
We all need to know these basic economic concepts, allowing us
to help make the decisions with the politicians and economists.
Randy Charles Epping is the author of A Beginner’s Guide to the World Economy, published by Vintage Books, and is currently the managing director of a Swiss-based international consulting company. He is also the president of the Central Europe Foundation–which provides scholarships to students from Central and Eastern Europe. He has written several articles for Newsweek, and has been featured as a financial expert on CNN Television, CNN Espanol, and FOX 5 Good Day New York.
Highlights from Cody’s Interview
Trust and Will
Trust and Will is an easy, fast, and secure way to set up your estate plan online. When our customers come to trustandwill.com, they are going to choose between one of our three products. Whether you choose our easiest and most affordable product or our trust product which is our premium product, you can get done within anywhere from 5 to 15 minutes for most people. Everything is pretty streamlined. It’s all done online. We have live customer support throughout the experience. You can go through the whole process for free until the very end. We want people to get the full Trust and Will experience, be able to ask any questions along the way. Then the paywall is in there for the printing of the documents which is to make these documents legally valid. You sign off the signature, get a notary and/or witness’ signatures depending on the state that you live in. That’s the only offline part of our business, everything else is online.
The first product we offer is called Guardian. As the name suggests, it’s really a product for first-time parents. So if you just had kids but you don’t own a home or have any assets that you think are worth collecting, or you don’t want to think about death and if you want to be buried or cremated, Guardian is just a nomination of guardian. The form takes five minutes, it’s only $50, and it is incredibly easy to do. It’s a very responsible thing to do if you have minor children at home.
Our second product is the one that most people would think or know of; it’s our Will package, which is $129 for couples and $69 for individuals. Either you’ve experienced it through your own family, or you’ve heard of it through TV pop culture: “Grandma’s going to leave me out of the will if I don’t get through college”. The Will is both, the last will and testament, and Power of Attorney healthcare directive; so who can, not only make financial decisions on your medical behalf but also how to catalog who looks after your kids. So guardianship is also a part of that. You have the assets that you’re cataloging as well as your final wishes; do you want to be buried or cremated.
Then our third product is our Trust, which is a $500 product. The Trust is built for the homeowners or wealth builders. If you think, for most American families, the largest asset they’ll ever own is oftentimes the home that they live in. The Trust package avoids probate; a Will has to be probated, or if you die without a will, it has to be probated. The Trust package really is the best offering that we can provide from an estate planning perspective, but it does require some hand-holding and education beyond our Will and Guardian tiers. So those are the three products we have in the market today.
The conversation around trust and will started a couple of years back: so about two and a half years ago, right before my wife and I got married. We sat down around a dinner table and discussed joint finances, life insurance, and we asked each other if we have a will. And for a fairly savvy, millennial consumer, and a financially conscious person, I was surprised that I didn’t know of any venture-backed startups that were doing this and were easy, affordable, intuitive, and very much like TurboTax. So the only two doors that I thought to go down was, door number one: go spend thousands of dollars with an attorney for something that may be too complex for my wife and my current situation. And then door number two is, go get something that’s just very off the shelf from LegalZoom, very templated, and that their core customer base is small business owners, not families.
So we had the conversation, and we didn’t want to go spend thousands of dollars with an attorney in wanting something very basic like LegalZoom. So I sat down with my friends, who are co-founders now: Daniel and Bryan. They both come from custom software development background and they both are married. Also, Daniel has got a kid on the way too. It’s a very real time in our lives, as well as many of our friends whom I call the elder millennials i.e. the 30 to 40-year crowd, that we’re starting families at record rates. 90% of children born are to millennial parents now. It’s a very real reflection of our network to start thinking about this along with life insurance and the greater financial journey.
We felt that there’s a huge lack in the market that half the population does not have these documents. And the half that do, oftentimes have out-of-date documents; they’re in a box in their garage, they’re at the bank, they haven’t been touched in years or decades. So we wanted to make it easy for people to update their existing estate plan, as well as capture the demand of young parents that are first-time homebuyers that are naturally going to set this up at some point, but they can choose to do it in a digital format with Trust and Will.
Trust and Will was my third startup and second venture-backed company, so I kind of knew from the beginning. There are a couple of foundational building pieces that I think are really important for entrepreneurs to think about. From the beginning, we worked with best in-class corporate counsel. We opened up our bank account in Silicon Valley Bank. We went and got insurance like D&O/E&O legal professionals liability insurance. As you can imagine, we went and hired the best-in-class trust and estate attorney. We started fundraising straight from the beginning. We wanted to move incredibly fast because some things were changing in the market that we wanted to be ahead of.
We raised half a million dollars out of the gates, mostly from angel investors as well as the infamous Techstars Accelerator, which we participated in January to April of 2018. We launched our first product almost five months after incorporation, in April of 2018, which was “last will and testament” just in California, Texas. Fast forward a year and a half coming up on two years later, we’ve now had three products in our current sphere, and we’ve had over 65,000 people sign up with Trust and Will since that launch.
We were very forgiving of some of our bugs in the early days, so we did offer some of our members free product or a heavily discounted product as a thank you for their patience. Within that first week, we had our first paid customer, in April 2018. We’ve had a really nice ramp-up of our revenue, especially when we introduced our Trust product nationwide in April 2019. The Trust product is, again, $129 for the Will and $500 for the Trust. Most of our revenue now is coming from our Trust package, which is great for us. It’s really a testament to our product and engineering team for building something that people can get through easily and they have the confidence and trust that it is the right fit for them. We never want to force our members to choose the Trust just because it’s a more expensive item. The Will and Guardian package are phenomenal, and you can upgrade to the Trust anytime. We’ve been on a really nice run with our revenue, and that has made our investors happy. Also, that has allowed us to raise $8 million in venture capital today.
Our product has evolved, of course. We got the beta versions done in-house, no offshore. I’ve worked with offshore companies, they’re fine, but if you want quality and you want speed, in-house is the way to go. My two co-founders come from a custom software development background, so we knew exactly what to build within those first few months. Myself being an entrepreneur and this being my startup number three, I knew how to spin up product teams. We went from first lines of code in late October of 2017 to a live beta in early February of 2018, to a first launched paid product in April of 2018.
First and foremost, either a very good personal encounter with estate planning or a very bad encounter with estate planning is what caused these angel venture capitalists to invest in Trust and Will. For a lot of folks that are now in the 30-60 year old age range, they’re oftentimes falling into a caregiver role for aging parents and grandparents. For aging parents or grandparents that don’t have these documents set up, when they do pass, it can create a mess for the family; not just an emotional mess, but a financial mess. It’s oftentimes in probate where family members or caregivers will come out of the woodworks and sue each other.
So we had a lot of angel investors that had very bad taste in their mouth with their own families experience. And on the flip side, for some of them who are a little bit younger or are parents and homeowners, they’re very proactive. They’re like, “Hey, I’m very happy that I set this up, but it’s very expensive, it’s very antiquated. I don’t like spending $1,000 with my attorney just for a simple update. I would love to import my estate plan into Trust and Will’s format, and be able to maintain it from there”. So that’s what got a lot of the early investors very excited. These were cheques ranging from $10,000 to $40,000. There were some folks in our network that were betting on us as the team based on our previous careers and track records, betting on their own personal experiences, as well as the market opportunity. There’s a 180 billion dollars in services revenue generated every year from the trust and estates industry, and there’s never been a category-leading brand like TurboTax for this space before. That’s what got them excited for the long-term potential.
There’s a huge difference between angel investors and venture capitalists. With angels, it’s their money. Whereas, with VCs, it’s other people’s money. So with venture capitalists, you’d have limited partners. They go fundraise themselves, they raise these funds, they have a thesis. A lot of VCs now want to see every investment that they’re taking a bet on, to have the potential to return the fund, which is huge. You see companies like Honey, which just exited to PayPal for $4 billion, return the lead seed investor’s investment by like 300x, which is insane. I think when WhatsApp exited to Facebook, Sequoia put in $3 million that returned them $3 billion. But it’s not that every company is going to have that level of return.
Our seed investors are Revolution, specifically Rise of the Rest® Seed Fund. This is Steve Case’s venture capital firm; co-founder of AOL. We have Western Technology Investment out of the Bay Area. They’ve done Facebook, Google, Palantir; hundreds of companies over there 30+ years and operating history. Then we’ve a couple of consumer funds out of Los Angeles. We’re very fortunate that when we went and pitched them, it wasn’t just our team’s experience, it was the market opportunity, it was our early traction of growth, revenues, partnerships. I think that when we painted that landscape of who were the other players and how we positioned our competitive advantage over them, that’s what ultimately got them to lean in. So that was the seed stage.
Then the Series A is a whole another level. Venturing the Series A crunch, it is so hard to get to a Series A fundraise. You have to have million plus in revenue or explosive growth metrics. You have to have a massive market opportunity. You have to have defensibility either through IP, your own user volume partnerships. There has to be distribution models. Your financials have to be insanely dialed in and thoughtful and logical over the next three to five years of how you’re going to achieve building a category-leading company.
We were very fortunate that a lot of the investors we pitched at the Series A had been on our company update since our seed round. So every single month, we were sending out updates, we were showing progress and traction. By the time we went out to fundraise in September 2019, out of the 50 emails I sent, it led to 40 partner pitches, and that all happened within three weeks. So we have all these pitches happening with investors on the same timeline. What was great is that, as we worked that timeline over the next six weeks or so, we were essentially working a funnel. We had investors that were coming into the funnel, we had investors that were bouncing out; meaning that they passed on the deal which was totally okay. It came down to a firm “LinkVentures” that led around, that we’re incredibly excited about. It’s a new hundred million dollar data-heavy fund out of Boston area, that we’re just so impressed with them. They’re impressed with us. And while the partnership is new, just to kind of paint light to how that came to be. [Unclear]
The first couple of hundred people really came from our network. As I mentioned, most of our network is 30 to 40, they’re married, they’re having kids, they’re buying their first home. We reached out through LinkedIn, Facebook, email, texts, phone calls; basically begging people to try it out. It’s one of these things, especially for parents, if they haven’t done it, they know they should do it. If they’re about to get on an airplane and they haven’t done it, there’s even more urgency to get it done. So we learned a ton during those first few months when we were beta testing, and even as we converted people to paid customers going into April 2018. So most of that came through our existing networks as a team.
For the customers that we acquired later last year, we went full stack on our marketing efforts. We have been running everything from paid Google marketing to paid social marketing; specifically Facebook and Instagram. We’ve been testing radio ads, podcast advertising, direct mailer campaigns, micro-influencers, which has been very successful for us. Our audience is parents with 1,000 to 10,000 followers. So we’ve been giving them free products, getting them to post it, having tracking capabilities to see the conversion of their following into our funnel. And then we have financial services institutions. We have some big insurance company partnerships. So we’re extending the tentacles in a little bit of everything to run tests to see where we’re getting the best return. For most of 2019, it was getting people to the website, getting them to register, and we’ll continue to do that. But really, now it’s working the funnel, once we’ve got people from the registration, getting them to paid customers. We have so much opportunity in-product, in our retargeting efforts on Facebook and email, to really dial in our conversions to help us drive towards profitability over the next year to year and a half. It’s with that plan and the path to profitability that we’ll continue to charge on the venture side, so we can go continue to build hopefully a public company one day.
What has been most difficult is, in the early days of a startup, which we’re still there, I think that you have limited resources. Now it’s a little bit different with Series A, but even as a seed stage, most of your team including yourselves are getting paid under market rate. We can incentivize with good benefits and options for our employees, but you really have to get people dialed in on the vision and the mission of the company. We have to have a shared purpose that we can all get behind every single day coming in. Sometimes it just starts with the process, like you put a process in place: Monday, we spend a full hour every week recapping the previous week, planning out the next week. Every morning from Tuesday to Friday, we’re doing team stand-ups, we’re talking about the product, we’re talking about marketing, we’re talking about customer success, we’re talking about legal. You have this entire investment, at least in our case, these first two years of our business leading up to this Series A, with a team of seven people with limited capacity because we’re all wearing different hats.
All of that experience goes into, not just the digital version of our product, but the end documents. These final documents that we ship out to our customers for them to sign and notarize, that is a legally binding document that carries significant weight on the decisions and how they impact their family; who looks after their kids, who gets their assets, and how their final wishes are carried out. So to think through the entire investment leading up to that document set going out, that is what we do every single day. That’s what we strive for. So operationally, we had to put a lot of processes in place, even as a small team, in order to make that a reality for our customers. Most importantly, have a quality set of documents, that if handed to an attorney or a financial advisor or a family member, that can be read, digested easily, but also wouldn’t be held up in court. That’s what we’ve spent a lot of our time doing.
You can find out more on “trustandwill.com”. We are honored to have any of you guys come to the website. We have live chat support, so please let us know if you heard about Trust and Will on the podcast. We’re happy to take care of you.