In Depth - From reluctant founder to $2B valuation: The story of Persona | Rick Song (Co-founder and CEO)
Rick Song, co-founder and CEO of Persona, shares his journey from being a reluctant entrepreneur to leading a successful identity verification platform. Initially skeptical about the viability of a universal identity solution, Rick and his co-founder Charles embarked on a path of exploration, focusing on building a flexible platform that could cater to diverse customer needs. They started by addressing specific customer problems, such as age verification for an e-commerce company, and gradually expanded their offerings by iterating based on customer feedback. This approach allowed them to develop a platform capable of serving various industries, from fintech to e-commerce, by solving identity-related challenges.
Rick emphasizes the importance of adaptability and customer-centricity in building a platform business. He highlights the need for founders to remain engaged in sales and solutioning processes, as understanding customer problems is crucial for developing effective solutions. Rick also discusses the challenges of scaling a platform business, noting that it requires a unique go-to-market strategy and a culture that embraces reactivity and continuous learning. He reflects on the importance of focusing on the journey rather than the destination, finding fulfillment in the relationships and growth of the team, and maintaining a balance between technical excellence and commercial sensibility.
Key Points:
- Start with customer problems: Persona began by solving specific customer issues, such as age verification, which helped them iterate and expand their platform.
- Adaptability is key: Building a platform requires flexibility and a willingness to continuously learn and adapt to customer needs.
- Founder engagement: Founders should remain involved in sales and solutioning to understand customer problems and develop effective solutions.
- Scaling challenges: Scaling a platform business involves unique go-to-market strategies and a culture that supports reactivity and continuous learning.
- Focus on the journey: Rick emphasizes the importance of finding fulfillment in the process and relationships built along the way, rather than just the end goal.
Details:
1. 🎭 Entrepreneurial Doubts and Realizations
- Entrepreneurs often grapple with doubts about the long-term viability of their business model, questioning if it can sustain and grow.
- The idea of creating a universal, cross-platform solution is often perceived as unrealistic and potentially a farce.
- Many business identities are deeply verticalized, which can limit cross-platform applicability.
- Entrepreneurs fear investing significant time (e.g., four years) only to discover the company has no future, leading to difficult admissions of failure.
- To navigate these challenges, entrepreneurs can focus on market research to validate their business model early on, reducing the risk of investing in a non-viable idea.
- Developing a flexible business model that can adapt to changes and integrating customer feedback can improve long-term sustainability.
- Diversifying product offerings and exploring different market segments can mitigate the risk associated with verticalization.
- Establishing a robust support network of mentors and industry experts can provide guidance and reassurance during uncertain times.
2. 🚀 Founding Persona: The Beginning
- Rick Song, co-founder and CEO of Persona, successfully raised $200 million in a Series D round, reflecting strong investor confidence and effective leadership.
- In 2018, Rick transitioned from an engineer at Square to founding Persona, marking a significant career shift that required overcoming initial reluctance.
- Despite his hesitations, Rick embraced the founder role by leveraging his technical background to address identity verification challenges.
- Persona's growth strategy was innovative, focusing on securing the first 10 customers quickly and adopting a broad market approach rather than a narrow ideal customer profile (ICP), which allowed for greater flexibility and market penetration.
- The company faced early challenges typical of start-ups, such as market positioning and customer acquisition, but succeeded by prioritizing adaptability and customer feedback.
- Rick's leadership emphasized strategic foresight, demonstrated by the early decision to not limit the platform to a specific sector, thereby broadening its applicability and appeal.
3. 💡 From Square to Startup: Identity Verification Journey
- The founder of Persona gained significant experience in risk management and identity verification while working on Square Capital, a financial services product known for its innovation in lending and financial solutions.
- While at Square, the founder contributed to expanding Square Capital into a multi-product category, requiring the development and generalization of identity and fraud risk products.
- With four years of experience focused on fraud identity at Square, the founder played a key role in supporting the growth of Square Capital, which became a leader in the industry with its innovative approach to financial services.
- The transition from Square involved collaboration with product counterparts and engaging in broader projects beyond Square Capital, which included tackling new identity verification challenges.
- This foundational experience at Square, particularly in risk and identity verification, directly informed the launch of Persona, a company dedicated to providing comprehensive identity verification solutions across industries.
4. 👥 Building the Team and Early Challenges
- The startup journey is unpredictable, as evidenced by the experience with Square, which had to overcome the 'trough of disillusionment' before correcting its narrative in the public market's eyes.
- A key motivation for starting the company was the influence and encouragement of a roommate, who had a strong entrepreneurial background and was persistent in pushing the idea of founding a startup.
- The co-founder had experience with identity fraud, which was a foundational element in deciding to pursue this new venture, indicating the importance of leveraging past expertise in new business endeavors.
- Early challenges included overcoming initial disillusionment and redefining the company narrative, which are critical for aligning team goals and market perception.
- Building a strong team was facilitated by leveraging existing networks and expertise, which helped in addressing early-stage challenges effectively.
5. 🔍 Exploring Identity Verification Solutions
- At Square, a gap was identified in effectively orchestrating identity verification across multiple vendors, suggesting an opportunity for innovation.
- No immediate venture was pursued at Square, but the potential for a dedicated company in this space was recognized as significant.
- The formation of Persona was driven by the desire to address these challenges and continue professional growth during a career transition.
- Over four to five years, experiences at Square incubated ideas that led to Persona, emphasizing the need for better identity verification solutions.
6. 🛠️ Developing a Business Strategy
- The decision to start a company was initiated by a potential split between partners, motivating a joint venture rather than pursuing separate paths.
- Partner A expressed contentment with their role at Square but was driven by Partner B's intention to explore other startups, creating urgency for a collaborative project.
- They committed to a six-month trial of the startup, with the agreement to join a company together if the venture did not succeed, highlighting their strong desire to collaborate.
- The partners were influenced by the understanding that life is short, prompting a willingness to take risks and explore new opportunities.
7. 💪 The Reluctant Entrepreneur: Motivation and Challenges
- The speaker initially planned to return to a corporate career after trying entrepreneurship, indicating a temporary approach rather than a long-term commitment.
- Despite initial reluctance, the speaker's entrepreneurial venture succeeded, challenging typical Silicon Valley narratives of passionate founders.
- Backward rationalization played a role in the speaker's success, where outcomes are rationalized in hindsight, making them seem logical or inevitable.
- The unpredictable nature of AI's future is acknowledged, with current trends potentially being seen as obvious successes or failures in hindsight, underscoring the uncertainty inherent in entrepreneurial ventures.
8. 🏗️ Building a Platform: Challenges and Strategies
8.1. Motivation in Platform Building
8.2. Strategies for Differentiation
9. 🌐 Navigating Competitive Markets and Execution
- Leaders, particularly in companies with long-tenured employees like Persona, find strong motivation in a sense of duty and the fear of letting people down. This drives their commitment to the company's success.
- Motivation in leadership should not solely derive from company lore but from a continuous desire to build and improve processes.
- Unique insights are often born from skepticism and cynicism, prompting leaders to question assumptions and deeply understand market dynamics.
- For example, implementing a critical approach helped reduce product development cycles and enhance market responsiveness.
- Leaders who engage in this critical thinking often uncover innovative solutions that directly impact competitive positioning.
10. 🎓 Learning and Growth as a Founder
- Finding an edge requires questioning conventional thinking and identifying what others might be overlooking, even if the advantage seems small.
- Cynicism and reluctance can contribute to differentiation, as demonstrated by the founders' experience.
- The founders leveraged their prior experience in building infrastructure at Square to gain an edge in the fragmented identity space.
- Initial product decisions focused on small, achievable goals, starting with seeking any paying customers as validation.
- Awareness of the fragmented and fractured nature of identity was crucial in shaping the initial approach.