Can the discipline of a pilot steer the future of fintech? In this captivating episode of ’73 and Sunny,’ we sit down with William Schoeffler, founder of Hitch, a trailblazing fintech platform. William shares his unique path from aspiring fighter pilot and EMT to pioneering in the fintech space, revealing the adrenaline and discipline behind his ventures. His journey underscores the importance of preparation, from the cockpit to the market, and how it’s possible to tackle uncertainties with the right mindset and tools. Hitch exemplifies innovation, transforming a traditionally tedious process into a swift, five-day journey, challenging industry norms and setting new standards for efficiency and customer satisfaction. Join us for a deep dive into the intersections of technology, finance, and the entrepreneurial spirit, where we explore what it takes to turn complex challenges into groundbreaking solutions.
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Damien: Hello, and welcome to 73 and sunny, the podcast about the journey of getting things just right. We talk to tech sales and marketing leaders about how they’re growing, dialing in best practices and getting closer to that sweet spot. Today, we’re happy to have William Scheffler join us. William is the founder of Hitch, a digital home equity lender, and he’s been building innovative solutions to help owners homeowners tap into their home equity.
So William, thank you very much for joining us today on 73 and sunny.
William: Thank you for having me. It’s been great to follow the verse story. And we’ve been working with you guys as well for the last few years. And it really helped us in the early days to help kick off our sales and marketing efforts.
Damien: We appreciate it. And speaking of early days, I know that you have experienced not only in being an entrepreneur and the founder of companies, but also as a pilot. And as an EMT and an Eagle Scout. I, I think when I think of those William, I think of, my blood pressure raising like very edge of your seat type of occupations or hobby.
So what is it about those that that attracts you to some of those more risky risky occupations or risky hobbies?
William: At the time I actually got those certifications in high school. So I was. Trying to figure out what I wanted to do with my life. And one point I wanted to be a fighter pilot.
So I was like, Oh, I gotta get my pilot’s license. And then this was at the same time I was like, Oh, but it seems law enforcement or being a firefighter or something was also super cool. So I started taking classes at the junior college at the same time as the pilot’s license. And so I was just trying to explore and.
Yes, it is an adrenaline rush of these different professions. But I also just found it super fascinating and it’s one of those things where what you learn is like highly applicable and like the way they teach it to you is like you, you need to know exactly what you’re doing to be successful.
And it, it really pushes some discipline into you in terms of studying and
Damien: practicing. It reminds me of one of at a sales kickoff one time we had an astronaut that a Canadian astronaut that has a big YouTube following and people were wondering like, what, how are you not freaking out up there?
If something goes wrong, how are you not freaking out? And his answer was. Because I have prepared enough to make sure that I knew anything that could go wrong and what the path was to, to what you’re saying, what the answer was to anything that was going wrong. And so you don’t get nervous if you know that there’s a path to any of these.
And do you see that in terms of what EMT or a pilot, if something goes wrong. Is it, is that just what it is? Do you, is the sweet spot between, risk and reward that you’ve studied enough and you have that, the confidence that, Hey, even if something goes wrong, I know how to handle it.
William: I have to admit, I was still nervous. I was still flying the first times and then still editing. It’s you’re moving faster at the air and you have to really think well in advance of whatever you’re doing. You have to prepare well in advance. I had a great instructor and I’d think that the learning process for getting your pilot’s license has been refined over the years.
And so you’re really doing many weeks of ground school where you’re learning every aspect of weather and navigation and just the engineering of the planes so you can figure out how to troubleshoot things. But one of the things that I thought was super great about. The profession is basically, I wasn’t a professional pilot, but I got my pilot’s license, but they teach you how to use checklists and everything that you do.
And so there, there are best practices and they’ve been honed and you have these checklist cards so that no matter whatever you’re doing, right when you’re starting your process of going out to the plane, you’re doing your old pre flight checklist. Checklist. You get in the plane, you’re doing your whole checklist before you take off and then when you’re even landing there’s so many checklists of, this is the right procedure, and then you just keep practicing that over and over again.
And, it, there’s it’s simple in a way for some of these procedures. But you always even a pilot who is flying for Southwest will still have a checklist on their leg that they’re looking at referring to just to make sure that they get everything exactly right. And so I’ve always thought that was an interesting takeaway from the whole profession is that you could do these very complicated things that can seem very scary.
And you are relying on certain gut reactions, but you’re also prepared. And you have your whole checklist built out to help you through every step of the flight.
Damien: Got it. And makes total sense. And it makes me feel a little bit better about flying that there’s, there’s a lot of that preparation.
And as you said, being able to prepare well in advance, but as an entrepreneur, sometimes there’s no playbook. Sometimes there is no if you’re trying to break into something new and if you’re trying to do something innovative, There isn’t that checklist. There isn’t that best practice. So how have you taken maybe what you’ve learned from some of your other training and your other experiences into becoming an entrepreneur?
And what is that sweet spot of being able to be checking the checklist, but also not getting into that analysis by paralysis or paralysis by analysis. So it’s how do you manage kind of those things? And how do you approach being an entrepreneur knowing that there’s, there might not be a checklist.
William: Yeah, just a side story before I say dive into that. I had actually somebody met in college who he’s like, Oh, you have your pilot’s license. I just read a study that said that like successful whatever CEOs usually have their pilot’s license. And so he decided to just get his pilot’s license just because of that.
And so sometimes it doesn’t always translate into that study, but I do think it the handling of risk and uncertainties is important.
Damien: Correlation is not causation. Yeah. And it’s Oh yeah, you can get it, but it is, I think it’s that threshold of being able to allow for some of that stress and some of that.
But go ahead.
William: It’s an interesting question. I’d say one piece of it is there’s many parts of your business that you do have to iterate on, and then there’s other parts that you probably shouldn’t be innovating on. I think I just was listening to a Y Combinators speakers and they were talking about Some of these founders think they need to innovate on everything and they’re trying to innovate a legal structure and accounting.
And maybe that’s not what you’re bringing value to for your customers. If you’re innovating on those things, maybe that just adds unreasonable complexity. So it is true. You have to figure out what is going to be the breakthrough in the industry and in the product category. And you have to iterate.
Like for example we spent a lot of time iterating on sales and marketing. But there are a lot of sales and marketing playbooks as well that you can help scale certain best practices using outbound dialing or outbound texting. And so I think there’s a mix of, I think what really helps is getting the overall mix is usually pretty unique.
But some of the ground tactics sometimes are there are companies out there that have already led in terms of creating certain playbooks.
Damien: Okay. And knowing a little bit about Hitch, maybe if you can tell our audience a little bit, Hitch innovates itself in terms of the timing of. Of this process and dealing with or a the improvement off of how people normally look at, having a new key lock or getting that in the time involved in the coordination.
I know that this became a professional. There was a personal story of yours that. You saw your parents going through a refinance. You’re like this could be solved by software. So what’s the innovation that Hitch brings to the table?
William: You did your studying. Yeah, so with Hitch, we focus on home equity and we’re basically innovating around unlocking your home equity.
And so what we first built when we launched last year was a product around HELOC. And so what’s super interesting about this category is It is the lowest cost interest rate loan that consumers can get compared to like personal loans, credit cards. And this is a product that you can actually innovate in because you can work with whoever you sell the loans to, credit unions for example.
To bring in true innovation and how you do underwriting and how the application works. We took a lot of that learnings from the personal loan side and brought them into HELOC. And for example, we’re able to close HELOCs from application to funded loan in five days. And that compares to the average of 50 days.
For other banks and credit unions who just do it traditional manual methods, which end up working in some cases, but it makes it very challenging for them to scale. It’s very expensive. And there’s a lot of consumers who will just opt to more costly credit because they don’t want to deal with that whole process.
Damien: And I wish I knew about Hitch a little over a year ago when I went through my HELOC process. It was way over. And I think that there’s been a lot more checks and balances. I went through a credit union that I’ve used in the past, there’s so much more in terms of compliance and we know everything about the 2007, 2008 mortgage meltdown, and there’s just so many more pieces that need to go ahead.
And so it’s great to hear that we’re able to bring that process or that hitch is able to bring that process and into the 21st century. Yeah, I just wish that I knew about it when I was going going through that process a little bit ago. But people who are not familiar, I think this is just really the sweet spot of FinTech.
It really is the it’s a financial solution. That uses technology. And I think people are sometimes lost as to what FinTech is or isn’t. And maybe if you can tell me, and that’s actually where we first met William was at a FinTech meetup. But maybe you can give give our listeners a little bit on your perspective on the state of FinTech today, or even a definition of, Hey, what FinTech is because, our traditional banks, FinTech, do they.
Leverage technology. Does that count as FinTech is, is Apple, I pay or Google paid, in of itself just an easier way to to do all this, and how do we classify those and and what’s different about FinTech than just. Just what we’ve done in the past.
William: No, it’s a fascinating question. And yeah, we met at FinTech meetup, which was a wild event. I think there was a thousand tables or something like that. And
Damien: a lot
William: of room and you could just be all sorts of people in the whole FinTech world universe. So yeah with FinTech. Actually, this is a question I saw yesterday on a podcast, which is what is banking as a service and how has that even defined?
And what does that even mean? And in all these things have evolved over time. Traditionally some people did view just fintech as just you’re providing software to banks or you’re providing software to your financial technology companies. So you could say, I’m a data company and I’m providing data to someone who uses it for underwriting and I’m a fintech.
And then you could say that you’re doing one of these baking as a service plays where really you’re just providing software for running a credit card company and fintechs can use you as well. But I think one of these VCs, his name is Rex, was doing a whole deep dive. We’re really like you gotta think about it.
The FinTech penetration still has been somewhat small in the overall revenue pool compared to the financial institutions that have existed that the chases of the world and but for us, like the huge revenue pool. Really is still lending. Lending is a massive industry. And we’ve had a number of goes like companies such as even Capital One in the eighties and Lending Club and others who have really like focused on how do you innovate in the unsecured credit space, which has brought a lot of cool new products such as, just personal loans overall.
They’ve really. dominated in the upstarts of the world unsecured consumer credit. For us, we focus on secured consumer credit facility for homeowners. And we think there’s a lot of innovation there. It’s a wildly complicated problem because as you probably experienced yourself, historically, it’s always been done just manually.
That’s because you’re navigating all sorts of compliance, all sorts of rules or sorts of issues. And these are large loans. These are a hundred thousand dollar plus loan sizes. And so it’s a meaty issue. It’s taken us a while to really continue to iterate and hone the platform, but it’s a super, super interesting problem to, to be in.
Damien: It is. And I appreciate the insight in the background there. I was talking to my kids after we have four kids ranging, from 14 to almost 23 now. And one of the sessions that I attended was embedded finance and they’re like what is embedded finance? And I was amazed and I was like I first gave them the example of if you’re.
Wanting to rent a car, which I haven’t rented a car in, I don’t know how many years, if you want to rent a car, then they’re also selling you insurance. So when you go to rent a car, you’re not thinking, oh, I’m going to, I’m going to buy an insurance policy, but a lot of times you do. And so that, embedded finance or was, so that didn’t really resonate with them because they’ll probably never rent a car.
But what did was I said, how about this? How about Starbucks? Like Starbucks? I said, Starbucks. You could think of as a bank because they have the Starbucks app on their phones. My the kids love to, to go to Starbucks and get the super sugary drinks and whatever it might be. And they have this money, they load the money on there.
So it’s like a bank. It’s a little checking account that you can only use at Starbucks. And so it’s just a way that Starbucks can have all this money. And they can make percentages off of that money until you use that at their stores, or if you lose it, or if you don’t use it, that’s great by them because now they can just, they have all that money.
And that is just another example of a embedded finance that I don’t think, I don’t even think we think about like when we’re loading those cards in, but it’s like, all of this is becoming so much. Easier to spend money or to get a personal loan. And that’s, what also hitch is doing is just, Hey, listen, we can bring this into the 21st century.
We can make this process where you don’t have to have someone come to your house and you’re signing the 50 million different things. Yeah,
William: and it’s interesting because, we launched a white label product as well. So in some sort of the definition, you can say that’s embedded as well, because we work with other lenders.
And we help them embed it into their flows if people want to get Helox. But it is interesting because there’s this huge pitch that people will say, like, all of software is going to become financial technology companies. If you have some sort of workflow tool they’re all Combining like ADP has their own bank license, which is wild.
And then all these other FinTechs are starting to enable SAS companies to embed like a a small business loan into your flow. Maybe your accounting software and you want to offer small business loans because you see and have some interesting sort of data set. So like you said, insurance, all these things are starting to get embedded.
But the lending is such a great revenue source. That I think a lot of companies want to tap into
Damien: these. I think they do, but I think they’re also trying to navigate all these new rules and what rules not only that are in today that maybe not everyone has followed, but also in, in regards to the new FCC regulations or the TCPA regulations, how is hitch approaching.
And learning about advertising and on the online market, online marketplaces where you might’ve been able to sell leads to a whole bunch of different people before, but now you’re not going to be able to do that in the future. What is, what’s Hitch’s and William’s thoughts on that?
William: It’s been super interesting to follow. I personally, when we actually found out about verse from LendingTree when we were going through their marketplace. And for example, in our space, like. The lending tree will dominate search. So whenever you type into Google HELOC, basically they’ll be at the top almost every single time.
It’s very impressive. And historically like that has been the model. It’s like you go in the lending tree, you fill out the fit forms and then in their model, they don’t always click through. People are typically being texted and called. And so historically that is. That is what a lot of lenders in the HELOC space have done.
Like I had a one company in our space was. They were spending a million dollars a month on LendingTree and they would have a warehouse of a hundred loan officers just power dialing and they were trying to refine their outbound calls to like within two seconds. And they’d show these charts of if you don’t call them within 30 seconds, this sort of conversion drops off.
Like 50 percent or something like that, and it’s a competitive world with some of these old models that they’ve historically worked, but they’re working less and less because people are answering their phones less and less, and people are getting better filters, and if you fill out these online late forms, You can get a lot of options, and it’s great.
And in one sense, but sometimes turning that outbound call to you offer that text message becomes a little bit of a jaded experience. And so my assumption is that. One of these regulators went through that themselves and they’re like, what is going on here? And that was this whole new push by the FCC to release these guidelines, which say that as like you can’t, you can quote it yourself because you’ve been studying this for a long time.
Can you tell me exactly what the guidelines say? Give us a summary real quick.
Damien: Oh, I’m not going to be able to say, exactly what it is. And don’t take any legal advice, but basically you need explicit one to one opt in for the, so really what’s going to happen is, what people have done in the past is going to lending tree and say, Hey, I.
I want to buy a house or I’m I’m pre approved for this or whatever it might be, I’m looking to buy a house. That’s a, a million dollars and lending tree would just say, how about these? Or they would say, great, someone will get in touch with you. And they would sell those. To a whole bunch of different lenders.
But now what it is, it’s going to be is that you’re going to have to explicitly say lending tree is going to have to put something up on their site. Say, do you want to be contacted by bank of America? And you’re going to have to say, click. Yes. Do you want to be contacted by Wells Fargo, this credit union, that credit union.
And so there has to be explicit. And all then and only then can lending tree sell the information of that visitor to those to those people and only then can like Bank of America or a credit union then reach out to that person because they have that, that that consent. And so that’s, it’s going to be making it so good news on the consumer side.
We’re not going to be inundated with a whole bunch of junk messages, but I think it also will be tougher on the smaller lenders who might have more competitive rates. Bank of America might be able to say, Hey, lending tree, we’re going to pay you 500, 000 just to be number one on your list.
And I don’t know if that’s going to be, if that’s going to be legal or not, but then it might push down other smaller regional banks and credit unions that say, Hey, listen, we have a better product. We have better service. And they might not ever. Be found because it’s, they’re not paying to play.
William: Yeah it’s super interesting. It’s really an evolving space where everyone’s testing their funnels and testing the different UX to be compliant. And so I’ve heard everything from a lending tree executive saying, it’s not going to change much. We’re just changing the consent language to some people saying it’s changing everything.
And actually had this interesting experience recently where we got a just a photographer online. Just, I forget what marketing, I think it was thumbtack. We went through the Thumbtack marketplace, we got a photographer, and I’m curious the compliance of this field, so this new regulation, but basically the way they handled it was okay, we connected you with this person, you opted in, and then they immediately popped up five other people, five other photographers, and they already checked.
They’re like, do you want, are you sure you don’t like, do you want to get like better quotes? It usually people who opt into these five others will get better quotes and better offers. And I just clicked immediately yes. And so it’s interesting is that actually just the solution?
And I immediately clicked yes because I wanted better, I wanted multiple quotes and multiple offers. So it’s going to be interesting to see exactly how it impacts funnels.
Damien: Yeah, we actually just we have a webinar coming up to, to talk about exactly that. Versa will be having a webinar about the compliance and about what, what’s going to be happening.
But, I think there’s going to, there are very specific guidelines on that. I don’t think it can be auto populated. Yes. As an opt in they need to, they actually need to click on it to do it individually or click on a top button that will say yes to all of these. And that is the, and then that lending tree or whatever.
Needs to hold on to that that form and that, that date stamp of this is exactly when they did it. And they have the screen recording and everything to be able to make sure that they see where your cursor was, if this ever goes to trial, but it was I actually just got Last week I received, one of those class action lawsuits that you don’t even know that you are a part of.
It’s oh, were you contacted by Facebook or something? Or at and t owes you 67 cents or something. I actually received one this last week on a class action suit. I wasn’t even aware that I was involved in, it was for TCPA because of this financial institution. And I received over 200 in a check.
And I was like, is this a joke? Because normally you think if it’s real money, there’s some type of catch or something, but I was looking at it and it was all, and I did the research, but it was a real class action that like it was a 10 million class action lawsuit that I think a lot of people were obviously a part of, but I was shocked.
At that. And I think that it’s at the amount it was, but I do think it’s probably like the Napster and in the two thousands that they’re going to be making examples out of some of these lenders and some of these predatory. People who are just calling and emailing and not not listening to people when they’re on a do not call list.
So it’s going to be, it’s going to be, I think, good for consumers. And there, there could be some negatives in terms of options for consumers as well.
William: Yeah. And I have an interesting experience too, because I fill out these lead forms all the time just to test them. And so my phone is completely inundated with 10 calls a day of random salespeople.
And these are sophisticated operations. There are dialers that are built just for these online marketplaces. Because they’re trying to get to you within a set, a second, and they’re trying to dial you 15 times within the first three days and all these tactics, and then multiply that by five, five lenders who are going after you and it, and there’s all sorts of upsells that these dialers will have to spam, spam guru and all these things to get around all these interesting And I actually had a friend who I was just talking to this weekend who she sold her mortgage company two years ago.
And she was just talking about the due diligence and the TCPA rules as well. And they had to, they, there was this whole conversation about the language they used to opt in. And that was a real sticking point. And she cautions me all the time. She says, it’ll come back to bite you if you’re not compliant with TCPA.
It is literally 500 fine, like per infraction. So you literally message, you’ll go under as a company. If you don’t get the stuff,
Damien: yeah. That’s what happened was that at almost a 10 million settlement, but that goes back to the fact that you’re doing that William, just like you’re testing these out and you’re willing to do that.
It goes back to the, just the risky behavior that is just throughout your life, you’re just, The pilot. Yeah. I’ll take on the risk of being a pilot, I’ll take on the risk of being a a Guinea pig for some of these sales teams and stuff. But speaking of other risks, I, so you’re broken alone, other risks.
So you’re you are you’re moving from the west coast to the to, to the you’re in the middle of a, kind of a move to the, to New York. So what precipitated that, what’s what’s the draw for the East coast?
William: I have a business partner that I’m working with out in New York and we’d started the company remotely and would like to make some hires in, in person for sales hires and product hires as well.
And New York it still is like the, one of the top FinTech debt destinations. So like it’s the Bay Area or it’s New York that is one of the two. Bay area is great and it’s starting to come back, but I think New York still has a little bit of an edge when it comes to FinTech. And so that’s what I’m going to go there and explore.
And hopefully we can plant our flag in New York.
Damien: sounds great. And last question, William, any advice for any prospective entrepreneurs and in terms of starting a business, what to do or what not to do, just say, if there’s one or two things, Just be careful about or do what?
William: Interesting question. I’ve seen a lot of, I’ve had a lot of friends in, in, in the entrepreneurial world. And so I’ve seen like the full spectrum of success stories, like 20 year olds who became sold their company for dozens and dozens of millions of dollars. And and other people who just nothing really ended up happening and they’re in credit card debt.
So I think the biggest thing is that I’ve come to realize more and more is like Trying to find great thought partners to work with throughout the journey. It’s hard enough and you have, you can have great employees who are specialized in marketing or they specialize in sales, but you really need that network of thought partners who are in your industry, in your space, help you really think through the next parts of your business and how to guide it.
And so I think finding a really good network of advisors preferably like a co founder or early employees. You have some equity that can really help you think strategically about your business. I think that’s probably the biggest thing is trying to get multiple perspectives on what you’re doing so that you can really triangulate to what the truth is.
Damien: Well, William, thanks for being a great thought partner to us here at not only adverse, but on 73 and sunny best of luck, not only with hitch, but also with the move to New York. And thank you very much for your time and insight. Thank you.
