Doug: Hey, what’s going on? Welcome to the Doug show. My name is Doug Cunnington. And today we’re talking to my new buddy, Zach. And I met Zach at a FinCon. I think I passed his booth where you know, he was talking about his company and then like all good friends that you make at FinCon, it was in the lobby, having a beer where we ended up talking a little bit more.
So Zach, how’s it going today? It’s going good. Good to be here. And Zach, I’m going to, I’m going to read your intro here. So you’re a software developer and entrepreneur. You recently left your corporate job to found a new company. It’s my budget coach, which we’ll talk a little bit more about. And your passion is helping others build the fire.
They want through spending money intentionally. You’re out of the Lexington, Kentucky area, and you have a wife and two kids. So good, good intro. It touches a couple little things. Now, the thing we’re going to talk about today is, you know, starting a company, leaving your full time job, and you have actually worked on a couple other startups in the past.
So I want to. I want to kind of jump back. So you went to school for, uh, software. What was your
Zach: degree in? Yeah, I actually didn’t go to school for software. I went to school, like a small liberal arts school and they didn’t have software development as a major. And I didn’t really realize that that was kind of what I wanted to do until later on.
So I, I majored in like media and mathematics, which were like kind of the two closest things that my school offered really just self taught. Taught myself on the internet. There’s so many good resources out there and kind of getting I ended up starting a company, one of these companies in college while I was studying as well, but more self taught than, than educated properly.
Doug: Okay. Oh, interesting. All right. So that’s pretty cool. Cause I think a lot of people do come at it sideways. And then ironically, I went, I have a soft software background. I have a computer engineering degree, but I never used it. That was cool. Yeah, so I never actually did much development except for internships and stuff.
So with that said, it sounds like you have the entrepreneurship bug in you. So did that, was that something like you always kind of knew, like when you were a kid, you were trying to sell lemonade and cut grass or whatever? Yeah.
Zach: Yeah, it’s funny you said that. Um, when I was a kid, there was like a music festival in our hometown and my parents like lost me and I found like a truck that was selling water and these people like took me on and I was like sitting in the back selling bottles of water and I was like the number one seller for the weekend and I just loved it.
But yeah, building things, coming up with ideas, the whole like zero to one concept of like having a vision of something you think might be, you know, valuable or worth building and then kind of making that vision a reality. I just, I love that stuff. So yeah.
Doug: So you. Started two other companies pick one of them for now, and let’s talk about it.
Like, how did it go? And you mentioned you exited from, from one, so you sold it. So maybe let’s talk about that one. It sounds interesting.
Zach: Yeah, sure. So the the music festival actually is a good tie. And so my small town growing up was home to like the, kind of the longest running, like, Christian music festival.
I was like founded as like a, like a religious alternative to Woodstock back in the seventies or something like that, which is kind of funny. But yeah, so, You know, when iOS came out, when iPhones came out and everybody was making apps for things it was kind of my dream to take like that booklet that they would sell that had all the artists and all the stages and all that, and build like a mobile version of it because like, it was hard.
There were like five stages. You got to pick like, what’s your favorite bands are, who you want to see at different times and Building a schedule and getting reminded and getting pointed towards that stage. So, that was kind of like the first start of that company. Basically we built like, event apps.
So we built apps, white labeled apps that would be branded to that like, event. So we’d built them for like, music festivals, conferences. We ended up getting in like the K through 12 and the college space as well. So we did apps for like university of Michigan, university of Ohio. Really like.
White labeled event software that could help people make the most of their time in a space is kind of like what our niche was. And we kind of grew it from there.
Doug: How many like employees did you have? Like, what was the scope of this? How many users and all that?
Zach: Yeah. Yeah. At the height of that company, we had a office downtown.
It was like a 3000 square foot, like old, like warehouse. So it was like I think it used to be a. Uh, so it was kind of cool. They’re huge, like warehouse stores and stuff like that. But I think we had like 12 people in the office, I think six on, on a payroll. We had a bunch of interns as well. And yeah, we were building, you know, hundreds of apps per year and shipping them all around the country.
And it was a pretty cool model. Like some, somewhere direct pay where we would get paid. subscription for the app per year. And some were like, we would do it for free through for K through 12 schools. And then we’d go out and find sponsors in their local community that wanted to sponsor the app for them.
And that was kind of the model. So it was a lot of like B2C, B2B. It was kind of, you know, the whole gambit there.
Doug: Okay. Interesting. And did you have, well it sounds like you had to have so many skills, right? So I imagine you started solo, right? You got, Sort of a skeleton and MVP type product rolling. You had to add more people.
You had 12. What kind of roles were they? Cause it sounds like you had some sales components, some, you know, I don’t know what other kind of folks would mean like with 12 people, maybe you don’t have HR, but you need to have someone who’s like managing operations too. So how did that work when you were growing and you realized, I don’t know how to do this stuff.
I need to hire someone that does.
Zach: Yeah, it’s funny you mentioned HR and our like company slack. We had like a little like, role called HR that just everybody was on it. So if you had a problem, you just tag at HR and you know, everybody be notified, which was kind of like our joke to, you know, subtly hint that something should go to HR, but we didn’t have an HR department, which was kind of funny.
But yeah, like when you are starting something new, yeah, you wear all the hats. Right. And I love that. I love being a little, A little bit into everything. And I don’t think I’m an expert at any of those areas, but in order to take something from zero to one, you have to be a little bit good at all of those things.
And so that’s kind of like what I’ve developed over the years. But yeah, as far as roles yeah, most of them were sales. We had Like about three or four on the technical team building the actual product itself. We had some like, client relationship people that would kind of keep up with the clients.
And then we had like interns, there was a lot of like data entry. So we partnered with like local high schools to bring some of their students on to, to be interns and they get to kind of work in a local tech company too, which was cool.
Doug: All right. Were there any crazy, silly mistakes that were made along the way?
I’m sure you have. Dozens cause I know how, how it goes. Maybe one of the bigger blunders that you had to recover and make sure you didn’t go out of business.
Zach: Yeah. I mean, so I, you know, I started this thing in college you know, starting with like one festival and then scaling to like a dozen festivals and then more and more each year.
But we would rebuild the product basically every year. Right. Cause I was so young and I didn’t know what I was doing and I would have to rebuild the product from scratch every year. And there would always be some technical limitation, right? The, one of the first years we did it the, like the API that the apps would hit to get like the latest data on like, you know, who was performing on what stage and where we didn’t cash that data and so every single.
App that hit it was like asking the database for that information. And it just like locked up the ability to go in on the back end and make it changes. So we learned quickly, you know, to cash that data so that, you know, it wouldn’t screw things up. But yeah further down the line, like we made all sorts of mistakes.
We grew too quick in certain ways and we couldn’t support like all of the users we had you know, like on the customer side, there were problems. You really. There’s a lot of fires to put out when you’re small and when you don’t have funding, right? When you don’t have money to throw at problems you’ve got to be nimble and try to try to fix all that.
So yeah, I’ve got plenty of, um, plenty of mistake stories. Honestly, I feel like I’ve failed a lot throughout my career, right? Like I, I’ve got several failures under my belt at this point, which is kind of nice. Cause you know, when you start something new, like this company, I’m starting now, like I’ve seen a lot, right.
I’ve messed up a lot. And I, you know, get kind of an intuition for it of like, I don’t think we should go down this path or that path because I’ve done something similar and I’ve screwed up before. So,
Doug: like I mentioned, I had the software background. So I took a lot of CS classes and I had internships and that sort of thing.
So I actually, you know, learned about different software phases. And since you were coming at this as a self taught person, and I’ve seen this with a lot of some of my friends Build plugins or other stuff. They don’t know how to do testing or requirements or like a lot of the pieces that should happen before you, you push that software, they don’t do it.
They don’t do it. So you end up with like some of the worst quality software. I mean, there’s so many bugs, like things that should be, should be caught. And you know how it is. You go in and you make one. Small change to fix something, but you break like four other things. So I’m curious, like, did you have a good testing regimen?
Uh, or were you one of the people that had to learn like, Oh, we need to do some phase testing here, maybe some smaller scale rollouts. How did that look for you early on?
Zach: Yeah, you’ve got people on all sides of the spectrum here, right? You’ve got like the move fast and break things, people, right. Who are just like iterate quickly, make changes.
And like, even if you break stuff, that’s fine. And you’ve got the people who are just like really heavy re like requirements and testing and all that. So I just left my corporate job in which I worked for like a, you know, top 20 bank in the United States. And like, that was. So much red tape, right? You have to be so careful on everything.
And for good reason, because there are millions of users, it’s regulated by the U S government, like all of those things. So I tend to fall typically more on the move fast and break things side of things, because like when you’re a young startup, you have to find product market fit. Right. You’ve got to find that there are people out there that you’re solving a real problem for the need that product.
And so I’d rather move quickly and change things constantly. I like the phrase like premature optimization is the root of all evil, right? People that really over engineer something before it needs to be done because then you give it to the users and you find there’s really not that much value there.
So yeah, it’s always a balance. Like we try to write code that is you know, well engineered, well maintained, but also like I like to move quick because I want to figure out what people need before we really dive into it. And with this latest, with this latest startup, I should also say that like, we’ve been partnering with like an open source, like alternative to like a bunch of budgeting apps called actual.
And we can get into that, like what the open source, like coding kind of community is like, but that’s been awesome as well because you have a lot of like, Extra help in that space.
Doug: Got it. And I think now, yeah, with the open source stuff and then just the ability that I, I assume we have to automate a lot of testing, like you could do like the, the quick regression testing and then like move on without spending days or weeks or whatever, but you’re right.
Yeah. There’s a balance between like, you know, waterfall agile and like somewhere in the middle, it probably works, but it depends on what you’re working on. So, okay. Well, before we transition over to my budget coach and the origin story, let’s talk about the exit often. You can’t share too much, but I’m curious how that looked.
I mean, you were a college student, maybe you didn’t build it in a way that was easy to exit. So I’m curious how that looked and sort of the process to negotiate. And. And then walking away.
Zach: Yeah. So I actually ended up exiting about like 10 years after the starting of this company. So I ran this company for quite some time and I was running it in parallel with like the other company that I’m still like a passive owner in.
And a lot of the same owners were involved in both companies. So it was kind of a unique situation, but I ended up bringing on partners like years down the road and those partners and had an interest in it and ended up. I’m coming together and buying me out essentially. So I didn’t have to go out there on the market and find a buyer.
Like I had it built in with the partners and I was just ready to kind of move on and do something new so that it kind of worked out.
Doug: Got it. That’s perfect. Did you know when you brought on the partners that they would have an interest, were they like a strategic partner in some way or they were just interested?
Zach: Yeah, it was a strategic decision in the sense that like, you know, I have my strengths and weaknesses and they filled in those weaknesses. Right. I didn’t, the angle wasn’t that eventually they would buy me out, but that’s what ended up happening.
Doug: Perfect. And that’s the best way too. Cause it’s like, it’s kind of your baby, you don’t want to sell it.
And then the details don’t matter, but I was going to say like, there’s some company that I’m aware of. They, they were purchased, they like rebranded and they’re shutting it down. I think they sent out an email. It’s like, we’re shutting down in one month, just gone. Like, so the original people may be disappointed.
So at least you were passing it on to people that like had skin in the game. And they worked on it and they, you know, well, since they bought you out, like they literally like they’re putting money and resources into it. So that’s good. All right. Let’s talk about my budget coach and that that’s the new product.
That’s the booth that you were running at the FinCon there. So what made you want to. Start a company in this area.
Zach: Yeah. So I don’t know how familiar you are with like the budgeting space, but there’s probably hundreds, if not like thousands of alternatives out there. Like we, when I first started this, I like started keeping a list of like all the competitors and I just gave up on it.
Cause like literally every day, every week on product hunt, somebody else is building a new budgeting app. Right. So, the story here is kind of like. My wife and I, like, there was a lot of change for us in the past, like a few years like four years ago, I guess, like you had like the pandemic, we had two kids during the pandemic, like back to back, which was pretty intense.
Not sure if I’d recommend it, but I love them dearly. Yeah, I was telling you a little bit before that my two year old just like Uh, overflow to sink. And like, we had to like rip out a ceiling and that’s what we’re dealing with currently, which love him dearly, but a lot of damage. So yeah, we had like a lot of changes going on and we got into budgeting cause like we, we needed to, like, I had just exited one of the companies, like money was tight.
We needed to like figure out what we were going to do on like a cashflow basis. So we started using like a zero based budget for the first time. And I had tried budgeting before and it never really worked for me. And I think it’s because I hadn’t found that zero based. Method zero based is like a method where you account for every single dollar that you own and you make a plan before you spend your money and like the, the ins and outs of like the ups and downs between months matter as well.
And, and that guy kind of gave me the sense of like complete control over my finances. Like I finally felt like I could, could control what was happening and understand what was happening and not feel anxious constantly about what we were going to do. And it was, it was a game changer for us. So like my wife and I fell in love with this, like there’s a whole other story there of like what it’s like.
To come together like with your, your spouse or a partner and like decide on your shared like values because like that’s literally what a budget is. It’s what you value. Right. And like what I value and what she values were like slightly different or very different in some areas, but we, we learned to like come together and find a shared understanding of that, which was super cool.
But we became like these people that like our friends and family would come to for budgeting advice. We like taught a class at our church. We taught like this quarterly class at our church. We actually ended up living in England for a few months last year and like that was the thing we did there too.
We were like, Hey, can we teach this class? So we taught the class over overseas and we were there, which was super fun. But we just geeked out about this stuff. Like it helped us so much. We loved it. How we founded this company though, as we realized like in teaching the software that like, it’s awesome.
It’s amazing. It changes people’s lives, but there’s such a steep learning curve. To learning how to actually live by a budget. And it’s one of those things where people like know that they should be budgeting, but then they don’t actually do it. And so my budget coach is basically a zero based budgeting app that includes access to a coach, because that’s what we’ve seen in our lives.
People need somebody to talk to and to help them get over the learning curve and to help them align their spending to the priorities. So that’s kind of why we started this company.
Doug: And I want to dig in a little bit more on the zero based budget versus like what other people might do, or, you know, for me, I’m not a huge fan of budgets cause it feels limiting, even though.
If you, if you flip it, it actually, like, it enables you to spend because you’re like, Oh, I have 1, 200 a month to spend on travel or whatever. And then you’re like, this money is allotted for that. What I ended up doing one, I was like completely unintentional, right? So I had like good salaries. So I was like, Oh, I’ll just do it.
Do whatever I want. And then it’s a really easy way to like lose control of putting those dollars towards what I, what is really valuable. Cause I’m just not thinking about it. And what my wife, my wife was really good at budgeting. So what we kind of ended up doing was more like arriving at a, like a, sort of a happy place.
So I, you know, I’m, I’m happy with the amount that I’m spending. And then it was more like expense tracking. In the, in the future for the past. Right. So, or maybe expense tracking in the present for the past, but the budget you’re thinking ahead and I’m just trying to break it down a little bit, but can you expand on like what might happen when people don’t have a budget or they’re not thinking about it?
Zach: Yeah. I mean, so like we would say a budget is just having a plan for your money. Right. So like, whether you make a lot of money, a little money, like having a plan is Probably always going to be a good call, right? You can live without a plan. You can look back at the month, like you kind of said, and you can like, see that you more or less kind of got to where you wanted to be, like based on what you value, but for a lot of people, they look back at the end of the month and they’re like, shoot, you know, like if I could do this all over, like I probably would have done less here and more here, or like, I wish I had saved more towards the end.
This right. And so looking backwards, like leads to kind of like regret and leads to you not being able to meet your goals over time. Whereas looking forwards allows you to pre plan for those things. Right. So, yeah, I mean, I always say to people like. Budgeting is a skill, it’s effort, it takes time, but like you can kind of choose your pain in life, right?
Like you can choose the pain of like taking on a skill and being diligent and being intentional about things. Or you can choose the pain of like not, right? And like for a lot of people, like we know what that’s like, right? Like it’s, it’s frustrating to like overdraft your account or to not be able to, to reach your goals or to get out of the paycheck to paycheck cycle.
So yeah, I think it’s, it’s worth it, but like I’m not going to deny that it takes effort. To like be intentional, right? Like, of course, with like time, money, any of those things, like it takes effort to live an intentional life. So as far as the types of budget, you mentioned expense tracking. I’d say there’s kind of three types of things that I see people think about like a budget being.
The first one is like people that just like do what I call like the one time Excel sheet. So they’ll like bring out an Excel sheet. They’ll write down some numbers. They’ll like, guess what they want to spend. And then like. That’s it. Right. They like pat themselves on the back. Cause like I made a budget.
Yay. And like, it’s not something that they actually live with. It’s not something that changes their behavior. It’s just something they do once and it doesn’t really have an impact on their life. The second one is like the expense tracking. So this would be like, like your mint. com. Like those types of things where.
You know, the end result, like you said, is like, you end up looking back at the end of the month, you’re like, ah, shoot, I guess I went over in these categories again, but there’s really no implication for that. Like there’s no consequence. Like if you go over by 200 and eating out, you don’t have to pull that from somewhere else.
Right. And that’s the truth of like, what’s happening with your money. There’s opportunity costs for everything you spend. Right. And so with a zero waste budget, you basically. Get down to 0 that aren’t allocated in some way. You have a plan for all of your dollars. There’s no just like slush fund essentially.
So if you want to overdraft or essentially overdo a category, you can do that. You just have to choose where to pull it from. And that gives you like a real. Decision you can make, right? Like if you want to go over and eating out by taking away from clothing or whatever, that’s a real discussion you can have with yourself.
It’s a real discussion you can have with your spouse without that. You just kind of look at your bank account. You’re like, I guess we can afford this. And you don’t really know the opportunity cost of what you’re taking away from yourself because you don’t have a plan. So that’s why I think zero base is like what’s actually needed in order to drive like actual change.
Doug: And I think this is implied, but let’s say you’re doing what you’re supposed to. So you’re spending less than you earn, so you’ll have a surplus. And then that surplus, in order to get it to the zero that we’re looking for, that surplus should go to savings or some investment or something else, right?
Zach: Yeah.
The dopamine hit that we get at the end of every month when we get to go down our budget and take all those like greens that we saved and move them down. Like we keep our goals at the bottom of our budget. So like either something fun that we’re looking forward towards or like investment, like I’m so like delay gratification.
Like I always want to take that money and put it straight into the stock market. But my wife is like, we save so much, let’s put it towards this, you know, fun thing we want to do. But yeah, I mean, that’s, When you have goals and when you see that your savings directly contribute to those goals, it’s super motivating.
And then as far as like you mentioned, like zero out, like it’s important to emphasize that doesn’t mean spending all your money, right? It just means having a plan for all your money. So zero base doesn’t mean, you know, get your bank account down to zero. It means just get those like unplanned dollars down to zero essentially.
Doug: You sound like my wife. I think she does get the dopamine hit from like seeing we’re under, but I’ll tell you how much we’re under budget. When we, when we stopped recording for this year, but she’s like, she’s like, I don’t want to tell you that we’re, we’re under budget this, I mean, I could look at the spreadsheet as well.
Cause you’ll, cause you’ll go
Zach: spend it.
Doug: Yeah. I’ll be like, Oh man, maybe we should, uh, you know, get the extra guac on this meal. You know, it’s like 2 or whatever, or like 5 and I don’t know how much costs extra, like depending on the place, man. Prices are insane, especially like down in Atlanta. I don’t know, just.
At a hotel conference, like all the food’s expensive everywhere. Yeah,
Zach: it was crazy. It was like 20 bucks per meal or whatever. And my wife and I are super cheap. Like we started this when we were dating, but we’d always just like split a meal essentially, and we, we do that to this day and now we have two little kids.
So it’s harder to get away with like just a single meal for like the four of us. But Yeah, we’re just, we’re, we’re super cheap, but we see the results of all those cheapness, right? Like every time we save a little bit, we see where that goes and it’s super motivating.
Doug: Yeah. Well, and side note yeah, we’re, we’re a little frugal too.
But the thing is the portion sizes are so huge and we’re like, we’re not trying to like eat whatever 1500 calories in one meal here. Like we’ll just split this, we’ll be fine. Or we’ll like bring, we’ll bring like half of it home or whatever. Yeah. Yeah. But anyway, the other thing at conferences, I, I didn’t do it this time in Atlanta, but a lot of times I’ll go to a grocery store and just like buy a bunch of food, throw it in the fridge and then like eat, um, as much as I can, like out of my fridge at the hotel.
Were you in New Orleans a couple of years ago?
Zach: Yes. Yeah. So it was in New Orleans. It was my first FinCon, but we weren’t like presenting, we didn’t have a booth or anything. We were kind of like soft launching the company at that point.
Doug: Got it. Got it. Yeah. There was like, since we were right by the French quarter, it was easy to, I walked with a friend down to one of the local corner grocery stores and bought a bunch of stuff and then it was like set for the week.
So anyway, back on track here. So it’s a, it’s a budgeting app. How does the coaching come into play? Is that like, it seems like that would add more complexity. I’m sure it does.
Zach: Yeah, for sure. So part of like what we’re trying to do is make access to coaching like easier. So right now, like, you know, financial coaches is like a growing industry.
Like you go to fin con, you see like every year there’s kind of more and more emphasis on like financial coaching. We focus on like a subset of that, which is like a budget coach, right? So financial coach will cover like a ton of things. A budget coach really just helps you. With your budget and live and spend by like your values.
And some people would say that’s like too small of a subset to focus on. We think like budgeting is so foundational that like it actually warrants its own focus. Like if you can’t control your cashflow, like how are you ever going to save, invest, like build up wealth, all of those things. Right. So what we’re trying to do is we’re trying to.
Build the budget coaching industry as a whole with, there’s tons of people out there that are just like super passionate about budgeting. They’ve like, it’s changed their lives. They want to help others, but there’s no like platform for them to go to in order to coach. So like, I mean like the Uber model, this is like an overused example or whatever, but like, I don’t have any friends who would have driven a taxi.
But because Uber makes it simple as a platform to go and drive, like I’ve got plenty of friends who like did that to make money or whatever. We want to be the same for like budget coaching. Like if you’re passionate about budgeting, like if you’re the kind of person that tells your friends and family and helps them, like here’s a platform for you to go and like do that kind of at scale.
So yeah, the, the way budget coaching kind of works right now is like, um. Usually these people like have a website, they have their own website, which means they have to do their, their own SEO, their own like social, they have to like succeed as an independent business, which like, that’s just super hard.
And it’s a, it’s a hurdle for a lot of people. Like, you know, the other examples like Airbnb, like if you want to rent out your house, like imagine making your own, like Airbnb. Sales funnel for that, right? It’s just crazy. Like you’d go on Airbnb and get traffic that way. So we want to kind of be that, that place that does a lot of those things for coaches and then also helps them scale their efforts.
So one of the things that we’re doing, it’s really cool and kind of technical is building like digital avatars for each coach. Not sure if I shared with you much about how this works, but basically like our coaches build, they take all of like the conversations that they have. Because they have the same conversations over and over when they’re coaching people.
And oftentimes, like the first three sessions are like all about just like how to do X, Y and Z, and they sell their services in these huge packages where it’s like you have to sign up for six months and it costs 1000 and just super inaccessible for people to get started. So what we’re doing is we’re taking all those conversations.
We’re building them out. Digitally, we’re allowing people to get started with those kind of digital conversations for a super low cost. And then if you want to actually meet with a coach one on one, you can pay a kind of their hourly rate to do that. And so we think it’s like the best of both worlds where you’re still getting exposed to a coach.
You’re still learning like kind of their unique way of teaching how to deal with money. But you’re doing it in a way that’s like cost effective and helps both sides kind of like scale, essentially.
Doug: Yeah, it’s a really smart way to do it. I don’t do any budget coaching, but I’ve done other coaching and yeah, like you said, most of the time you just run through the same stuff, you’re answering kind of the same questions and I mean, it’s easy to forget to mention one of the things that you should do.
So like by sort of packaging it and like getting it all right up front, then you’re, you’re not going to forget stuff when you’re, yeah.
Zach: And you can kind of like. Yeah. I mean, like coaches will make like digital courses or they’ll write articles or videos, like try to get that information out somehow. But the problem is like, as a user.
That user has to go and like consume all that in all those different places. Right. And so like what we do is something called like contextual help in the sense that like these avatars live inside your budget and respond to like the actions you take, which is kind of cool. So like if your budget notices that you haven’t categorized the last like 30 transactions or whatever, that’s a trigger in the software for the avatar to pop up.
And then the coach gets to write whatever conversation they want to write for that. And so we want to try to replicate how a real coach would be. Would interact with somebody in real life and do that at scale. So that we can react to kind of all those common situations. And again, it’s contextual, it’s right there in your budget.
You don’t have to leave and go find a video. Like that’s how I learned stuff. Like there’s a guy named Nick true that taught like, um, YNAB. And he, he’s like, I think it was on FinCon staff for a while, but he makes amazing videos and you’ll see like most of that community in order to succeed, they have to go and learn.
His videos in order to succeed. And like, we just, we wanted to bring that contextual help inside the app. So you don’t have to go outside to learn it essentially.
Doug: So a lot of the budgeting software, I’ve never used any of it, by the way, but from what I understand, there’s a good learning curve or a steep learning curve.
So you have, you hop in there, there’s probably some obvious stuff, but like even the mechanics might be something that you have to, again, go through and, uh, look through like documentation or whatever. So. Does the coach avatar sort of walk you through as like, Hey, we’re starting here. Like you need to input this information as a baseline.
Don’t forget about your quarterly expenses or every six months. Don’t just look at monthly. So does it walk you from the very beginning where you’re like, I don’t know anything, what do I need to do?
Zach: Yeah, absolutely. So it’s, it’s like, it’s that, but it’s also more than that because coaches all have their own kind of unique take on how you should spend your money, right?
They have their own like unique audience that they serve. Like we have a coach who deals with like nurses cause she was a nurse and she knows like what they deal with. She can talk to them in their language. And so like when you use her avatar, the first question she asks you is like, Hey, are you also a nurse?
If you say yes, she’s going to take you down a completely different path, like completely different budget categories to set up completely different way of talking about like which accounts you should add, like all of those things. So we think that You know, financial advice is like super specific and we want to try to help people connect with somebody who gets that and can speak to them where they are.
And you know, no other budgeting platform is going to be able to do that because they all have to do it in like a generic way. But because we have this model of like connection to a specific coach, they can get to. Tailor it to you. And then like another flip side of that is like, we have coaches that have avatars and like languages.
Like, so we have Spanish coaches. We talked to a lady at FinCon who’s going to be doing like a Swahili coach, which is super exciting. But like most budgeting apps can’t do that because it’s not that like you can’t Google translate a page. Like that’s easy, but when it comes to like doing the support staff for that, your support staff has to be trained in that language and.
Our model is different because our support staff is the coach that you choose. And so we can, we can do that. So we’re, we’re having a lot of success, like in the Spanish speaking community and others because of that.
Doug: That’s a great idea. Like, like you mentioned certain professions or whatever people have a specific outlook or challenges that they have to figure out.
And it makes total sense to. Work with someone that knows the military implications and like different things that you may have to think about where, like, if you’re not in the military, you don’t have to think about those things. So. Great idea. And
Zach: there’s like, there’s like value based stuff as well.
Like there’s some people that are like anti credit cards or some people that are pro credit cards. There’s some people that are like, you know, this or that. And like we, as a, as a platform don’t take a stance on any of these things. Right. Like we have, we’re an open platform for coaches to come and kind of teach their way of teaching with, with money.
And that’s, that’s kind of unique in the space. And I want to see that grow for sure.
Doug: Have you, so let’s zoom out just for a second. So you’re doing this in the budgeting area. Are there other apps out there that can do this sort of thing? Cause there’s coaches in all different areas. So are you, are you, uh, creating this tool?
So it can be generalized if you’re, if you’re like, we should, this should be a fitness app, for example, right? There’s a billion freelance or independent coaches out there.
Zach: Yeah, that’s a great question. There are other people doing similar things. So you, you look at like a better help and like better help is like kind of doing this for therapists.
The difference is that like better help just connects you. And once you’re connected, like that’s kind of it, like budgeting. The tool that we build or the connection point is actually really meaningful as well, right? Like you meet inside your budget and like, that’s its own technical thing. Whereas like with better help, like the meeting point is just like a zoom call or whatever, right?
It’s not, it’s not that it’s the platform itself is super important to how it works. So yeah, I’ve thought about like, this is a general concept, these like digital avatars or contextual help is a general concept that could be used in multiple different industries. I’d say they’d be more powerful in industries where.
The place that you meet is important and that’s built around that. Like our avatars know how to interact with a budget. They can read from it. They can write to it, like all of that stuff. But I do think you see this like in the nutrition space, like new was trying to do this for awhile. You see this in like the fitness space.
We’ve had people tell us like, Various fitness apps that have like a similar model. A lot of those are moving towards like AI though and bots. So the conversations that you have will all be like generative AI, which can be helpful and cool for us that we’ve decided to completely avoid that. So like every conversation you have with one of these avatars, it’s, I could show you what this looks like.
It’s literally a flow chart that they build of just like. Hundreds or thousands of potential dialogue paths you go down. And it’s all like conditional based on variables that are set and all those things. So they’ve, they’ve really taken all the types of conversations they have based on different things.
And they’ve built where they’ve written that out in a way that a user goes down just one specific path. It’s really meaningful to them, but their flowchart is all these possible paths. It’s really a, it’s a cool thing.
Doug: Interesting. Okay. You have this flowchart. If, can someone like say, Hey, I want to actually meet in person with the coach that I’ve selected, is that something they could do also?
Or are they just stuck with the pre recorded, um,
Zach: yeah. So like the contextual help is never going to be. Perfect. Right. And it’s never going to replace that. So like, we have like tiers of access and we think that’s important because like, you need these lower tiers in order to scale efforts, right? Like now a coach can be working with quote unquote thousands of people at the same time, because they can all be interacting digitally, but we still have like a messaging center.
So you can like message like chat back and forth, and then you can sign up for zoom calls as well. And so that’s where like the monetization changes a little bit because you, you pay like the hourly rate for like a one on one call, whereas everything else is just like, built into like the base subscription.
And we let coaches kind of choose their own rate. So we, we publish that rate. And when you’re choosing a coach, you can choose according to that, if that matters to you. And we’re kind of unique in that way too, because like other companies that have done something similar, they bundle the whole cost of it.
So they’ll make it like, you know, 300 bucks a month to sign up for their service and you get X amount of hours. And then they stipulate what the rate is that these coaches make. Whereas like ours is like 15 a month. It’s super cheap to get started. And then you just pay the coach, whatever the coach charges.
Doug: Okay. And you said 15 a month.
Zach: Yeah. So it’s either 15 a month or like 99 per year for the, for the software. Yeah.
Doug: Got it. Okay. And is that pretty much competitive with other similar, you know, budgeting tools out there?
Zach: Yeah. So like ever since mint shut down it’s kind of been like a free for all.
There’ve been some, some companies who’ve really done well. And like the wake of that, like I’ve seen Monarch do a great job of like kind of capturing that wave. YNAB has done a great job every dollar. But yeah, most apps now cost money and you’ve got a lot of people who are You know, why, why aren’t budgeting apps free?
And the main like cost behind it, besides like the infrastructure and all that stuff is like bank sync. They’re like, there’s a cost to that. So like, if you want to connect your bank accounts, all the apps basically use like three or four providers on the backend. And those, those just have a cost to them.
So my personal, like, if we want to get into like the longterm, like what I think will happen in the industry or whatever, like, I think that the, the cost of budgeting apps will. Eventually go to zero because I think the software itself is, it’s just a glorified spreadsheet essentially. It, it does more than that.
And like, you know, keeping developers and building mobile apps and all that, like there is overhead to it. But I mentioned earlier, there’s like an open source alternative to a lot of these called actual budget that has like, dozens of developers that have contributed over time. And like, that’s like a free version Of one of these apps that you can use, you still have to pay for the bank sink.
Anyway, all that to say, if I look into the future, I think that the value in these like budgeting platforms, isn’t going to be the software itself. It’s going to be like the guidance and the teaching around the software. And that’s where I think we’re kind of poised to still be valuable down the line where some of these other companies that are just selling software, I just see that, that value going down over time
Doug: What what did you use before? You created this app. Yeah.
Zach: So, so I use YNAB. I don’t know if you’ve ever, if you’re familiar, used it, it’s called, do you need a budget and they’ve been leading kind of in the zero base space for a long time now. They just celebrate their 20 year anniversary. They are, they have like a cult following.
They’re beloved in the space. You know, kind of how I shared, like, you know, budgeting changed my life. So I wanted to help others. Like you’ve got a ton of, of YNABers who feel that way. So yeah, my wife and I use YNAB for like years. Loved it. But again, that learning curve, like that’s the thing that like, we just, like when we taught our friends and family, they didn’t get it unless we spent hours like texting them, calling them, going back and forth, answering all their questions.
And so that’s where we think like, you know, the industry is ready for a change in which there’s a connection to a coach,
Doug: right? Yeah. Interesting. And I heard, I never, like I said, I haven’t used any of the apps. I’ve just been a. Spreadsheet person and I did hear like YNAB had I didn’t realize it was that old by the way but I I remember I won’t mention who but a prominent podcaster like mentioned Oh, yeah YNAB said, you know, they had this affiliate program and then I think they just ended it, which I mean, that’s, unfortunately, that’s what could happen with affiliate programs or whatever.
I mean, businesses have to keep running and manage their cashflow and all that, but they had like a lot of people promoting them and then they pulled the rug out from under them and we’re like, Hey, we’re not paying, we’re not paying you anymore. This is over. Did you hear anything? And you can say no comment if you don’t want to get into the weeds.
Zach: Yeah, no, I I’ve heard of similar things. I mean, like I can’t. Yeah, like I, I’m not gonna like, yeah, I, I, I don’t know. Right. Like, what I’ll, what I will say is like, we. We’re trying to be super intentional, especially because we’re working with a network of coaches, right? Like we’re trying to be more than just a brand.
We’re trying to be a platform for all these coaches. So like, we’re trying to be really intentional with being good in these communities and like being a place where we can build good partnerships with like affiliates, with, with coaches, with everybody and make sure that you know, again, we think that the.
The marginal utility of the software itself will go down over time or the cost will go down. It’s that network. It’s those relationships that can basically help the world fall in love with budgeting by getting the word out and then, and then teaching them that that’s super core to who we are. So like, we’re going to try to avoid some of those mistakes that other companies might’ve made over time, essentially.
Yeah. Yeah.
Doug: So it sounds like the budgeting area is pretty good. I’m I’m in the fire community, the financial independence retire early. And most of the tools that I would go to in the past few years would be around long term projections. There’s some good ones. There’s some better ones. There’s some really simple ones.
We eventually hired an advisor after like working interviewing many of them. We ended up working with a fee only advisor and the software that CFPs are using are, it’s fantastic. It’s like on a different level, it’s still a glorified spreadsheet when you peel it back, but they could, they can make some changes that were much more difficult where you have to, you know, you have to be a wizard.
In Excel to be able to do these. But anyway, the point is, does, does the software do those long term projections for, if someone’s like, Oh, when can I retire? Can you get into that level of sort of future projections?
Zach: Yeah. Are you familiar with projection lab, Kyle Nolan’s projects?
Doug: I, I am a little bit, I need to talk to him. I think but, but yeah, I think I’m familiar with it.
Zach: Yeah. So, he’s a friend of mine. Like he I think they won like second place at like the startup competition at FinCon this past year. They, they cut the startup competition this year, which I was sad about. Cause we were going to try to try to do that, but they cut it.
Yeah, so like, yeah, I’m familiar with some of these tools. I actually built the extension that connects YNAB to projection lab. So you can like with one click kind of move from YNAB to projection lab to kind of get there. I think that most the thing with budgeting apps is like, again, we want to be hyper focused on, you know, So you’re going to be hyper focused on actually changing behavior.
And so you’ve got some apps that try to be like everything in one. And I don’t know that they drive that actual behavior changes much because it’s more of like kind of this overwhelming amount of information. So I think that as a long term thing, we will probably partner with groups like projection lab or with any of those like longer term tools, because it’s fundamentally a different thing you’re trying to do at that point.
Like in zero based budgeting, you are dealing with the money that you have. And making a plan for it and in projections, like you’re, you know, you’re, you’re guesstimating what the future will be. And there’s value in those tools, but it’s, it’s a different tool in my book. So, we’re, we’re not planning to lean into that, but I would imagine us partnering with groups that do.
Doug: I agree with you. It’s a, it’s a different problem to solve. Okay, cool. Well, we need to start wrapping up a little bit here, but I want to zoom out a little bit and talk about like any big challenges in the last year or so in the business.
Zach: Yeah. So we just have kind of started this business, right? So I left my full time job, I think like five or six months ago at this point.
And my wife and I have, Save for years in order to be able to do something like this. So like when we started companies, you know, earlier when I was like in my twenties or whatever money was super tight. Like we were taking out credit cards at one point to cover people’s like, salaries during downtimes.
Like it was intense. But. But this is a little bit of a different game in the sense that we’ve saved four years. We lived under our means for years. We’ve budgeted for years in order to be able to do this. So, it’s been cool to be able to like, you know, we’ve already hired like three part time people that have been kind of growing the company with me.
As far as challenges, like. We’re kind of a two sided market, right? And if you talk to like entrepreneurs or whatever, everybody will tell you, do not try to create a marketplace because when you’re trying to do two sides, you’re constantly having to balance those sides of the market. So like we have coaches and we have users and we could choose to focus on one or the other or try to drop, drive them at the same time.
And what we did in the first kind of year of our companies, we chose to focus on coaches. Right. We wanted to get coaches on the platform so that when users came, we were ready. And so we’ve had a lot of success bringing on coaches. I think we’ve launched about 30 on the platform. We have like a discord server, about like 80 coaches that are all at some like various steps of like getting towards launching on a platform.
But the, the main challenge for us now is like, yeah, we’ve got these coaches. We’ve got this platform. We need to get out there and get users. So we’ve, we’ve had some users, we’ve had, you know, hundreds of users sign up in the past few months, but it just really hasn’t been our focus. We’re just now getting to the point where we’re, we’re ready to get out there.
And do that. So I’d say that’s kind of the main challenge moving forward. And that’s, you know, the whole thing, like, you, you know, about like the SEO world and like all that. So like building content trying to rank on Google trying to build an affiliate program, trying to kind of do all those things from scratch.
Uh, it’s, it’s a lot.
Doug: Yeah. It’s like everything. It’s there’s so much, man. Well, another thing I want to talk about, which I mean, it almost directly applies, even though we, we didn’t say it, but. You know, you’re talking about the zero based budgeting and all this was sort of like the personal finance area, but you’ve been a part of a few startups right now.
Like you said, you’ve saved for years to be able to give you an opportunity where I expect you’re not taking a salary. You’re not planning on taking a salary for a little while. You have some people working for you a part time. How, how are you managing like the cashflow? And can you give tips for people that are bootstrapped and maybe they don’t have the financial background?
Like you were literally teaching people how to do this. So like, you know, the most important thing is like, don’t go out of business, like live another day here so that you can keep selling or do whatever you got to do, but yeah, talk about cashflow and how you manage it for the company.
Zach: Yeah. The whole like die another day, like stay in it.
Right. Like as long as you’re like. Iterating fast and listening to what people want and adapting to that. Like eventually you’ll find product market fit. Right. So we have this thing called like. The intuition data cycle, like, so if you think about it, like, it’s just like two arrows that point to each other, but like on one side, it’s intuition on the other side, it’s data.
And like, we drive our whole company off of this. Like if you, if you have data to inform a decision, you go based on the data. If you don’t have data, it’s okay to go with your intuition, but make sure you set it in place. Tools that gather data that can inform it. And so every decision we make, be it from like how we spend our money to how we market all of those things.
It’s driven by that, that data loop. As far as like, yeah, how we spend our money. Yeah. I mean, a lot of that right now, again, like. Is intuition, right? Like I I’m saying, like, I think that this will be worth it. I think that this will be worth it. And we’re starting to gather the data on that. And whatever is, is feeding actual results.
We, we measure those results. Like whatever’s measured matters. Right. We try to stay away from like vanity metrics. This is something that I’ve fallen to in the past where like, I get really excited about metrics, like new user signups or something like that. And really. I would call that like a vanity metric because New Year’s or signups is cool, but paid and active users, users who have paid you and are actively using the platform every week, like that’s a much truer metric to what like impact you’re actually having in the world.
So I’d say, you know, be good about. Iterating quickly, trying different things, measuring what matters and then adjusting to that. But yeah, until you have that data, like you’re going to have to be willing to just use your intuition and, and burn capital in various ways to see what’s going to work.
Doug: Let’s get even more specific if we can. So we, we had talked like last week we had just touch base and, and see what you’re working on and, and kind of understand like what the company is all about. So. You need you, so you got some coaches, you need users. How, how are you going to decide how much to like spend on advertising?
That was part of our conversation, right? And then like the affiliate program and basically you have no data, you got to go with intuition. So how are you deciding like how much to spend on advertising? Cause the thing is like, whether you’re doing like drop shipping or you’re doing other types of ads or podcast ads or YouTube sponsorship Like it’s, it’s a complete mystery on like how it’s going to convert until you do it.
So how are you deciding how much to put in?
Zach: Yeah, well, I can tell you exactly like where my mindset was and what I’ve done. So in the past, I’ve had a lot of success with like Facebook ads. When I did like a B2C, like a, like an iOS app that had a subscription base, like we ran a single video ad that my sister and I made like seven years ago.
We ran that thing for like six years. Never changed the audience, let Facebook do its thing. And it ran profitably at like 10 bucks a day, nonstop forever. We grew that app to over like a million downloads based on this one ad that just worked. And so my bias has been like Facebook ads, like direct to consumer, run those, those Instagram, Facebook ads.
So I tried that for a number of months with this product and it’s a much more competitive space. And so we just weren’t able to To do it profitably. Right. So we went away from like, kind of like greenfield searching for users. And we tried to do social ads just on like a retargeting campaign. And we leave some of that running.
We also leaned a lot heavier into like high intent. So like Google search terms, because you know, those are people that are actually looking for it, but honestly, like at this point. We don’t know our lifetime value of the consumer. And a lot of those were expensive. Like we were paying upwards of like 30 or 40 to get like a free trial, which is probably not going to work out in the longterm.
So we basically have switched a lot of our efforts towards like SEO, like free things essentially. So, You know, we write a ton of articles. We have coaches write articles for our blog. We have started doing a little AI content as well, where we have AI generate some content in the kind of like areas we know people are searching for.
And then we have a human come in and change it afterwards. So our SEO is like growing. We I do a lot of like quoted. Do you ever use that site where you basically, there are There are like authors that are looking for quotes and then basically you go and write up like this really long, like helpful quote that they can use in their thing.
And then you get like a backlink from that. So we’re doing a lot of like kind of groundwork I’m posting on Reddit constantly. There’s a ton of people on Reddit every day asking for budgeting help. And if you can go in there and, and respond in a really helpful way. Like I try not to be super salesy and like, I also try to be really honest in the advice I give.
Like there are a ton of good budgeting apps and like if somebody needs something else, I try to point them that way as well. So that it’s like, like an honest thing. I don’t want to just be a shill for, you know, my own company. Right. Yeah, but we’re doing just a ton of like groundwork, stuff like that.
So like the money that we spend at this point is more in like the people we’ve hired to build that community. So most of the money has gone from advertising. We’ve turned a lot of that off and we put it into, you know, we have like a head of coach success. We have a head of engagement. We have a coach trainer.
Those are kind of the three part time staff that we’ve hired and building that community We think is going to be the longterm differentiator here. So that’s where the money’s going. But a lot of that, like you don’t see dividends for a while. So again, talk to me in like six months, talk to me to a year and I’ll have the data to show you like what’s working.
But right now, like it’s a lot of following our intuition and putting the money into building basically a platform, building a platform of people, because we think that’s going to be what’s valuable in the longterm.
Doug: That makes sense too. Yeah, it’s hard. It’s well, like you said, it’s crazy. Like that Facebook ad was running profitably for so many years.
I know, I know. And cause at some point, whatever the market chain, like they changed the algorithm, whatever. And then like all of a sudden the costs go up. Like, whatever, 30 x for a single, uh, lead or whatever. So, quick follow up. So you have a YouTube channel too. We’ll link up to all, all your stuff so people could check it out.
How’s that going? Because I know, like, you know, I’m biased towards YouTube generally. I like it. I I consume more YouTube than other stuff. Is that panning out for YouTube?
Zach: Yeah. So YouTube, we’re kind of on all the socials. We use like buffer as like a strategy to like pump our content out to like every channel at the same time.
YouTube, we’ve only done maybe one intentional long form video. That’s like unique to that platform. Everything else has been like content that’s been repurposed in various ways. We do use like Opus clips. Are you familiar with that tool?
Doug: I’ve heard of it. Yeah.
Zach: So you feed it like a longterm. Long term video or whatever, long form video.
And it will basically use AI to decide where it can make like 20 second clips that would be engaging to an audience. And then we tweak that afterwards. So every time we do like an interview or a podcast on somebody else’s podcast or our podcast, we use that to create content. So we do a lot of YouTube shorts.
We’ve done some long form and then we put all our interviews up there as well. Yeah, I think YouTube is an amazing space. Like that’s where I consume most of my content. And I think there’s a lot of people searching for budgeting content and like, we want to, Oh, this is another thing that I should mention is like at FinCon.
We talked to so many people who aren’t into budgeting, but they’ll say like, you know, I’m a YouTuber, I made one video on budgeting and like, it’s been my top viewed video, or I made one article on budgeting. It’s been my top article. Right. So it’s amazing to me, the amount of people that have basically seen that there is search out there for budgeting, even though that’s not their niche.
And so like, I feel like eventually we’ll crack it and we’ll start to, you know, kind of get some of that, that traffic, but yeah, YouTube is definitely part of our longterm strategy. It’s just right now, like you’re wearing all these hats and it’s like, where do you pour in your most time and that’s where we’ll do it based on whatever gets the best results, essentially.
Doug: Got it. Very interesting. Well, I was going to say, I’ll give you the video. If you want to take this, you can create shorts with it or the team can do it. And, uh, cool. Yeah, I’m up with, well, Zach, this has been awesome. So if people want to check out my budget coach, uh, where, where should they go?
Zach: Yeah, it’s just my budget coach.com. We’re on all the socials at my budget coach HQ, and then you can find me on LinkedIn or Twitter as well. It’s just Zach Welchel.
Doug: Okay, cool. Well, we’ll link up for all that stuff and yeah, I’m curious to see how it’ll go in the next six months, a year. All, all the things you’re working on make a lot of sense to me for people that like need to get their budget under control and like, just do it intentionally.
So I wish you good luck.
Zach: Thanks man. Appreciate it. It’s fun to talk shop too. So thanks for having me on.
Doug: All right. Thanks a lot, man.