S4E11 – Scott Donnell – Family Banking App that plays like a game!

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Key Timecodes

• (01:04) – Show intro and background history
• (05:11) – Deeper into his background history and experiences
• (08:42) – Understanding his business model
• (17:07) – What are the 7 money skills
• (24:21) – How his business model is monetized
• (28:09) – How his app teach about investing
• (30:58) – A bit about his numbers and strategies
• (34:38) – Understanding his marketing strategies
• (41:54) – A key takeaway from the guest
• (45:55) – What is the worst advice he ever received
• (47:24) – What is the best advice he ever received
• (48:12) – Guest contacts

Transcription

[00:00:00.000] – Intro

Hey. This is Sean Tepper, the host of Payback Time, an approachable and transparent podcast in building businesses, increasing wealth, and achieving financial freedom. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go.

[00:00:18.070] – Sean

My next guest has sold three other businesses in the past, including one for nine figures. Now he’s working on an app that helps kids and families become better with money. Specifically, it helps kids learn how to earn money, save money, invest, and a whole lot more. So if you’re a parent and you’re in one of those circumstances where your kids are always asking you for money, this app can be the solution. It’s really slick. In this episode, he really gets into personal finance. But we also talk about how he’s building this company. This is a B2C SaaS, low price point, and it’s starting to scale pretty fast without a whole lot of effort. So we talk about what he’s doing from a marketing perspective as well. This episode is packed with a ton of value around personal finance, as well as how to build a B2C SaaS. Please welcome Scott Donnell.

[00:01:05.100] – Sean

Scott, welcome to the show.

[00:01:06.590] – Scott

Good to be here. Thanks for having me.

[00:01:08.540] – Sean

Thanks for joining me. So why don’t you kick us off and tell us a little bit about your background?

[00:01:13.170] – Scott

Yeah. So I am the leading expert in financial literacy for kids and teenagers. We’ve helped about six million families, and that’s my passion. That’s probably one of the biggest needs we have as a country. The kids are not learning money in school, man. They’re not. They’re not learning anything about how to make and manage money. It’s just not helping them. Why do we have checking accounts if no kid’s ever going to write a check? You ever thought about that? Why do we jump to geometry and algebra without teaching kids taxes and investing and budgeting. It’s like, what the? This is crazy. So my background, my first company I started about 15 years ago is called APEX. It’s a school fundraising franchise. We raise money for schools, we teach leadership and fitness and character with our teams, and we go in and we raise money. So we’ve raised about half a billion dollars now for schools nationwide. It’s called APEX Fun Run. I started it because my wife was a first grade teacher before we had all our kids, and she spent her whole paycheck on those kids. And I was like, Why did you just spend a paycheck on your classroom?

[00:02:18.650] – Scott

She’s like, We all do that. And I was like, Okay, well, this stops now. So we started APEX to raise money for schools. Part of the money goes to the teachers to help cover their budgets in the rooms. The schools buy technology, teacher aids, playground equipment, all these things to help with the school. And the business exploded. It just went nationwide real quick. So we had millions of customers, 600 employees. It just took over. It basically replaced product sales. Instead of selling chocolate and magazines and gift cards and pizza and all that junk, we were able to create a system that made over twice as much money for the schools than they’d ever made before.

[00:03:01.000] – Sean

Nice.

[00:03:01.940] – Scott

So it just took off. And then as we started working in thousands of schools, we realized these kids aren’t learning money. They’re not learning financial competency. They’re not learning critical thinking or practical skills for success. What is going on? That was really the light bulb moment for me. So the last three companies I’ve had, as we’ve scaled all of them, have all been in financial literacy. First one we started doing was children’s business fairs. We started doing for free just for fun. I’ve never made a dime off of that business because it’s our giveback. But now there’s thousands of children’s business fairs all over the world. You can go to children’sbusinessfair. Com and start one today. And kids come to the local park once a year. They bring products that they made. They sell them to customers. They make 300 bucks in a few hours, and they are fired up, and they’re capable and confident for life. So that was the first one. And then when COVID hit, we started myfirstsale. Com, and that was to help kids do online businesses. Their first Etsy, their first Shopify, things like that. Amazon, helping them learn how to do a launch online.

[00:04:07.080] – Scott

So again, teaching kids money skills. And now we have Gravy Stack. Gravy Stack is an app that’s the first bank for kids and teens that’s Gameified. So now the kids learn all of our seven money skills through games and a real bank with mom and dad, and they’re intrinsically motivated to just create value everywhere they go. They earn, they manage money, they plan ahead, they cover their own expenses, successes in the home. They start to invest. They learn sharing. Then they go through all of our games to do all these real-life challenges to learn the skills to succeed. These kids are canceling subscriptions, Sean, in the home, in one of our games.

[00:04:45.250] – Sean

That’s awesome.

[00:04:46.350] – Scott

And they’re saving mom and dad about $547 on average in that one game. They’re getting coupons for the next grocery run. They’re flipping assets in the garage that mom and dad don’t want anymore. They’re going to garage sales. They’re doing gigs. It’s an unbelievable way to teach kids money skills. So that’s Gravy Stack.

[00:05:03.830] – Sean

Yes, I love it. And before we dive into Gravy Stack a little more, with the previous businesses, I see APEX, Children’s Business Fairs, and my first sale. Did you exit these three?

[00:05:17.300] – Scott

Yeah, we exited two of the three. I also had a biotech company that we took public in Toronto in 18 months. It was called Happy. It was a crazy nine-figure exit in 18 months. That was wild. But that was not for kids. Honestly, it was a favor to my relatives, and I scaled it, we built it, we took it public.

[00:05:36.640] – Sean

What was the name of that?

[00:05:37.970] – Scott

Happy Technologies. We basically digitized drugs. We give you the effect of sleepiness, alertness, focus with a frequency. Incredible technology. We licensed it, created a consumer product. It’s like a sleep pad that people can put under their pillow or on their back, on their work chair. Yeah, it’s called Happy. And we just, boom, took it public in Toronto. And then I was back on helping kids.

[00:06:00.020] – Sean

Interesting. That is impressive. In 18 months, is that from inception of business to going public?

[00:06:07.090] – Scott

Yeah, wild scale. It almost killed me. In fact, I have a podcast with Dave Asprey on Bulletproof Radio. Yeah, where I talked about how I had CEO burnout. My whole body gave out. It was just crazy, man. The mental stress, the physical, it was just doing road shows, still building the product. I mean, it was just crazy. All the marketing, all the growth, all the team build. We raised like 20 million bucks altogether for it.

[00:06:31.920] – Sean

We have raised 20 million in a nine-finger exit, you said?

[00:06:35.390] – Scott

Yeah.

[00:06:36.060] – Sean

Yeah. Because the listeners want to know, how did this scale? Was this a marketing hack or a sales hack?

[00:06:42.500] – Scott

Most of it was in the IP, right? We had just one of the world’s best IP technology. We had 40 patents on this tech. And so we’ve digitized drugs. So it was an incredible way for people to get off of pills, helped with people with addiction recovery, a lot of military vets, people with anxiousness or whatnot. It helped them a ton. And so we just got out and people started buying it like wildfire. They just got a deal in Target. Now they’re in all the Target, selling the products. But yeah, it’s called Happy Technologies.

[00:07:13.760] – Sean

And was it a subscription software? How was it monetized?

[00:07:17.130] – Scott

Yeah, it was a product, a consumer product for a couple of hundred bucks, and then like 10 bucks a month to have access to all the frequencies and the playlists.

[00:07:26.550] – Sean

Got you. So it’s that viral. It grew that quick through viral activity. That’s quite impressive. Okay.

[00:07:33.440] – Scott

Yeah, I’ve had a bunch of different businesses. That was a fast biotech scale. Apex was a franchise system. So we basically just plotted along for 10 years until we exited. We did exit that business for 30 times earnings. It was an incredible exit. But most of that was because we built a moat around our business at a mile wide. We were the best fundraiser in America, Barnard. And it was hassle-free. Our culture was incredible. We had 600 people all around the country, loving what they were doing every day, helping millions of kids. And we were 93 % rebook rate every year from schools. So in a way, it was a subscription. It’s just a large subscription, $50,000 a pop is what we’d raise for the average school. But that just started to scale. And then we started franchising it nationwide. So experienced business owners would come in, buy a territory, start supporting all the schools, and we give them all the tech, all the training, all the products, and all the SKUs just right to their door at the school. They just run the programs. And super fun business. Super fun business.

[00:08:42.370] – Sean

Was it a revenue split with the schools or were you charging the schools a fee?

[00:08:47.110] – Scott

It was a revenue split. We would get a percentage of the funds raised, which would incentivize the school. And there was a sliding scale. So our percentage that we would get would go down the more it was raised. So that the school would make more and more net. And so it usually covered our costs plus a few thousand bucks a school. And we just copy paste, copy paste with 10,000 schools.

[00:09:10.950] – Sean

Brilliant. That’s funny you bring out that. I thought of an idea like that, and I didn’t really fully execute on it, but creating a win-win for nonprofits where they don’t… They’re not charged anything, but you empower them with the tech and to more efficiently raise money, and then you share in the Rev, the smart model.

[00:09:29.830] – Scott

You executed. I’ll tell you, though, everybody likes to say you’re an overnight success. We had the wildest failures. Like, unbelievable failing in every direction. I think I have… People talk about my business successes, right? I’ve had a seven, eight, nine-figure exits now. But what they should be talking about is all my war medals. I have a thousand failures, man.

[00:09:53.310] – Sean

Please, let’s jump into three. I want to drill into three of these good ones, and then I want to dive in a gravy stack a little bit. Yeah.

[00:10:00.450] – Scott

Well, and again, you only lose, truly lose if you quit. Most of my failures were inside of the successes. Every company has failures every day. You got to try new things. You got to try new angles. You got to change your tech. You got to switch out people. You got to be able to grow. I’ve made so many mistakes on people decisions, but people are not expenses. People are investments. I can say there’s five people I can name off on one hand that made all those companies worth all that money and all that value. There’s a quote out there that one good hire is worth 10 times as much as an average hire. One great hire is worth 10 times as much as a good hire, and one world-class hire is 10 times better than the great. That’s a 1,000X change from an average employee. So what I’ve seen now is if you just invest in finding the best and you don’t settle, people will come in who are way better than you, with way better unique abilities and do things that you never even thought of to add value to the business and make things better and make things scale.

[00:11:07.490] – Scott

So I’ve had so many mistakes on the people side, but now I’m learning as you go. And you got to know that half of the time you make a mistake.

[00:11:16.540] – Sean

And.

[00:11:17.390] – Scott

The other half of the time, the team that got you here is not the team that gets you there. There’s a rule of three and ten. Every time a business hits that three or 10 milestone of revenue, you’ve got to think about switching out part of the team because there’s zero to one teams, there’s startup teams, there’s early adoption teams, there’s scale teams, and there’s management like growth long term teams. So if your company is at 300,000 versus a million, or three million versus 10 million, or 30 million versus 100 million, that’s a different bag of skills. So everyone listening, just think about where you’re at in your business. And how do you get to that breakthrough that next ceiling? Well, a lot of it is different skill sets and capabilities that gets you to the next milestone. So yeah, a lot of mistakes there. I think tech has been the biggest mistakes I’ve ever made. I’ve made millions of dollars of mistakes in technology. We’ve had websites crash with 40,000 people on them for Apex, crazy people threatening lawsuits, all these nightmares and technology. A lot of it was just not getting the best.

[00:12:25.420] – Scott

When we started APEX, we had $10 million of and printing and shirts and all these things that we give to schools and kids by doing the fundraisers. And we get them from overseas. And we started doing on Alibaba, of all places. And then things would start to come and these flying monkeys were cross-eyed and the Frisbees were flimsy and they wouldn’t fly. And these spinning tops would break in five seconds. And we’re like, Oh, my gosh. And we had no claws to be able to get anything back. We just made all these terrible mistakes. I had to get on an FBI watch list one time because we ordered a whole cargo ship full of flying finger rockets, those foam rockets that you fling for 150,000 kids. And the people, Barbie, her name was Barbie in Japan. She put rockets on the side of the box. So when it landed in LA at the port, they called the FBI because it just said rockets on the side and no one touched it. So I had to go out and show them it was finger rockets, like foam things. So just crazy mistakes, man. Crazy mistakes. And it doesn’t stop either.

[00:13:32.810] – Scott

People say like, Oh, yeah, once you get past it, you’re fine. As you scale and as you grow, it’s always going to be more and more bigger and bigger problems. So I think the real skill is learning to manage and create a self-managing company and a self-multiplying company with incredible people that are solving problems on your behalf. So I’ve had over 1,000 employees. The best thing you can do is find great people that are covering and fixing issues without having to get to you. Right. So for me, I’m only dealing with the problems that hundreds and hundreds of other people can’t solve. And I need to focus all my energy there. And if I didn’t have these thousand failures in my tool belt, because I don’t say that they’re in a garbage can, they’re in my tool belt, I can use that experience to be able to help me solve bigger and bigger problems. And now I’m solving billion dollar problems around the world instead of solving million dollar problems around the world. So Gravy Stack is going to be one of the top apps in the world. Mark my words. Our goal is 50 million families financially competent and ready to succeed, kids and parents.

[00:14:35.110] – Scott

It’s going to be one of the biggest in the world, but we have had to overcome $10 million of failures to get here. We have 30 patents on the app. We have a whole tech team, 20 people working around the clock building this thing. We’ve had to change over our tech three times. We’ve had all these mistakes when we go out to the market and families have issues and they’re like, Change this, fix that. It’s hundreds of iterations of this app. So you have to just go through that. It’s like a March, and you’re just hoping it’s not a death March. You’re hoping that it’s a March to the promised land. So it never ends. There’s a funny quote by Elon Musk where they’re like, What’s your advice to young entrepreneurs? He’s like, If you need to take encouragement and advice as an entrepreneur, then you’re not an entrepreneur. That’s the point. It’s like, I don’t need anybody’s encouragement. Obviously, I love encouragement. I need support. I need people around me, close friends that are accountable and trusted. But if I was doing this for the applause of others, I’d be done. I’d be done a decade ago.

[00:15:37.400] – Scott

I’m also not in it for the money. I could Coast, man. I could go all the way to my great grandkids being just fine now. But the more I learn about financial literacy, financial competencies, and family legacy, that’s what I train on now worldwide. Kids, it’s actually a bad idea to pass on all your stuff to the next generations. That’s how you get lottery ticket, kids. That’s how you get trust fund, kids. And 90 % of that’s gone by the grandkids anyway. But underneath that number is a whole host of problems, divorce, destruction, estrangement of kids, violence, emotional health issues, drugs, alcohol. When you give a kid stuff they didn’t earn, it causes a whole host of problems, and it kills their drive to create value in the world. That’s why we wrote the book, the best selling book that we just put out, Value Creation Kid. The healthy struggles your children need to succeed. That’s why we’re so focused on this, because Sean, if we can change the next generation’s mindset around this and create a whole army of tens of millions of kids that are just creating value everywhere they go, being financially competent, not straddling themselves in debt, blowing up the economy in a good way, it changes everything, man.

[00:16:46.160] – Scott

It changes all these other things down the line that everyone’s trying to focus on. This fixes all that, most all that. And so we train on two things, financial competency and family legacy, which is how you stay deeply connected with deep roots and wings with your family. When you put those two things together, it’s like rocket fuel for your children and your grandchildren. So that’s my life, dude.

[00:17:06.940] – Sean

That’s awesome. Good context there. I have so many different things I want to talk about here, but let’s jump into something we talked about before we hit record, which is the seven money skills. Let’s dive into that.

[00:17:19.320] – Scott

Yeah. So we have a course. So we have Gravy Stack, which is our app. You can just download that on iOS and Android, get going. If you have kids ages six and up, even through college-aged kids or teenagers or friends and kids or nieces and nephews, get on that app. The app is the best way to teach these seven money skills to your kids. It’s a real bank, and it’s a ton of gigs and games, and it creates the system in the home where kids are creating value all the time. It’s awesome. Okay? But our seven money skills, we actually have a course too that we train on our site. It’s our Family Money Skills course, and this goes through the seven money skills. So here they are: earn, save, spend, share, invest, protect, and borrow. And when I say protect, I mean actually online security, like keeping kids safe from predators, from hacking and data breaches and all those things. Kids need to learn online safety because that actually directly relates to protecting wealth, protecting with insurance or protecting against too many taxes. Protect is a huge thing for kids, and no one ever talks about it.

[00:18:19.310] – Scott

So after six million families have doing this, those are our seven. And each of the money skills, there’s four stages of them that we train on. So let’s take earn for a second, which is the first one. You can’t just be like, All right, 16-year-old kid, go get a job. When you come to earning, what is money? Kids actually have a wrong view of what money is. This is why you get kids who hoard everything because they’re scared, or kids who spend everything because they think it’ll be gone tomorrow. You have to take this idea of earning one step back, and it’s actually about creating value first. Money is a store of value. Money is not good or bad. A lot of the poverty mindset says that money is evil. Profit is evil, money is bad. It’s here today, gone tomorrow. But if you think that money is all good and it’s all your idol and it’s everything you care about in life, you’ve got just as many problems as the poverty mindset, because now it’s your identity. Now you’re going to basically give away everything in your family that matters the most, the relationships, the ties, the values of the family, and you’re going to raise a bunch of kids who are just terrified and anxious all the time.

[00:19:30.950] – Scott

These are unlimited demands that parents put on kids.

[00:19:34.510] – Sean

Yep.

[00:19:35.200] – Scott

So money is a store of value. And when you think about it that way, money is earned by creating one type of value, which we call material value. There’s also emotional value and spiritual value that you can create. And if we teach our kids to create value first, then that’s the rocket fuel for their future. So when it comes to earning money, money is just a result for creating value, material value. So the first thing we teach in Gravy Stack and in all of our workshops and everything we teach is teach your kids to create value first in the home. And we do it by having them do the home economy system. So in the app, this is our answer to allowance, by the way, because allowance is socialism. I mean, it’s basically giving your kids money for free, and it creates codependency. It’s actually linked in a bunch of studies to a lack of motivation and an aversion to work for kids, actually. So allowance is a terrible idea. So what we created was the home economy system because you need your kids to have making and managing money. Because if you just don’t pay them anything and they do all their chores for free and they never deal with real money, well, now they’re going to get out into the real world to make a bunch of mistakes.

[00:20:41.220] – Scott

Big, costly mistakes. So the home economy system has three E’s: expectations, expenses, extra pay. If you have teenagers or young kids, do this and you’re set. First, you set the expectations. Here’s what are the things you’re going to do in the home that you’re not getting paid for. This is your role in the home. Make your bed, clean your room, do your homework first, dishes trash. This is your role. You’re never getting a dime for that. If you want to keep our last name, you have your expectations. And then you have expenses that kids need to start covering. This is where all parents mess up, all of them. So don’t worry, you’re not alone. Parents pay for everything. They rarely give the kids things to cover on their own because the kids don’t have money. But if you give these expenses to your kids, now they have a motive to earn, which is the first money skill. So when you pass off expenses like toys, trinkets, games, any technology, your kids should make the money for their first phone when they’re teenagers, by the way. They’ll treat it like gold. Social outings with friends, social trips, birthday presents for the friends’ parties.

[00:21:45.650] – Scott

If the kid buys that present, they’re going to run in and be like, Open this right now. I want to see your face. If you do everything, they’re not going to learn generosity. They’re just going to chuck it on the table. So when you give kids expenses to be in charge of, then it goes into toilet, sporting equipment and clothes. Have them be in charge of planning ahead for these expenses. Now they want to earn. Now you give them the third E, which is extra pay opportunities, home gigs. And so in the app in Gravy Stack, we have like 55 of these gigs kids can do, and they repeat weekly, monthly, daily, mow the lawn, yard work, make a meal, sweep the garage, wash the windows, organize a closet, clean a bathroom, sweep the common areas, plan the next family trip, coupons for the next grocery run, all these gigs that the kids can do. But we also have brain gigs that they can use to earn. A brain gig teaches kids that they can make money using their brain. You and I make money using our brain. Why are we not teaching children this?

[00:22:44.850] – Scott

So a brain gig for us is like in the app, you can basically say, Hey, if you listen to this podcast and tell me two things you learned about it, you get three bucks. And one way you’re going to apply it to your life, it’s right there in the app. A Ted talk, a Prager U video, an article, a book, Rich Dad, Poor Dad, Acres of diamonds. All these incredible things kids and teens should be reading to prepare them for the real world. A real estate, an investing game or tool or book. We’re kids should make a few bucks learning these things on top of their expected homework because now they’re learning to use their brain to create value. What an unbelievable way to gamify the whole system. Now they think the whole thing is a game. We don’t say chores, we say gigs. And that way, the kids now are like, they’re pumped. We have kids doing on average, six gigs a week in our app with thousands of families, and they’re making, on average, 100 and something a month. But the parents are on fire because they’re like, Hey, we were spending hundreds a month.

[00:23:45.350] – Scott

Now the kids are spending less than we were because they’re getting smart about it. They’re learning the trade off of goods, prices of things. They don’t need the Air Jordans. They’re good with the Reeks. They’re getting smart and they’re planning ahead. This is how you teach a kid to budget. This is the only way to teach a kid to budget. If you think about.

[00:24:02.640] – Sean

It- Gameification is huge. We see this in learning. Like, for example, we really admire what Duolingo did for language learning. Write short to the point, don’t waste time, educate people and gamify the experience. What you’re doing here is really cool. I’ll be downloading your app here after the call. This is awesome. Let’s talk about building this business or let’s take a step back here. How is it monetized?

[00:24:28.320] – Scott

It’s seven dollars a month to start. Within a few months, we’re probably going to end up dumping some of that and make it way cheaper for people. But if they type in dinner 30, the word dinner and 3-0, they’ll get a month for free just as a gift for your listeners. And don’t forget that the average kid is saving mom and dad like $600 in the first month. So the return on this is about 80 to 100 fold right away. Not to mention all the long term success you’re giving your kids. If you download Gravy Stack, our parents that are using it are that kids are making about $1,000 outside the home in the first five to six months doing gigs in the community, neighborhood gigs because you take the capabilities at home. This is stage two of earning. Now you’re taking those capabilities elsewhere and bringing in extra revenue. So flipping assets in the garage that mom and dad don’t want anymore. Why not sell them online for 20 bucks, 50 bucks, 100 bucks? Go to garage sales. Why not do the gigs that you’ve been doing at home and just replicate them for the neighbors and the community?

[00:25:27.200] – Scott

So now they’re bringing in net funds. So this thing… This thing cash flows for mom and dad right away. Huge cash flow. And then don’t even forget, this is millions of dollars of change for the rest of their life. This changes kids’ mindsets for the whole world, and they never ask mom and dad for money again. That is the number one benefit of Gravy Stack. No more conflict over chores, no more issues around money and the greedy gimmies. Now the kids know exactly where to go to earn, cover their own expenses, plan ahead budget. And then when they make their money in Gravy Stack, it’s a real bank. So they get a debit card and you watch the money flow into their saving and investing jar. You watch some of it flow into their share jar, which hooks up to every nonprofit in the country. And then the rest goes into their spend jar for their debit card to start covering those expenses you gave them. So they’re watching that flow. That’s critical for kids. They have to see the flow of money digitally because it’s the only way to connect physical cash to the digital world, because kids and teens, all they see is you swiping your card.

[00:26:26.240] – Scott

They don’t see the pinch of spending. They see it. It’s just as easy as swiping that card. We had this issue with my daughter when she was four years old. We were taking the kids to dinner and we passed by the ice cream shop and Regan, my daughter, she’s like, Daddy, can we please get ice cream? I was like, Sweetheart, we haven’t had dinner yet. What are you talking about? Like, no. She goes, No, you don’t understand. Just take out your card in your pocket and you give it to the guy, and then we get ice cream. It’s as easy as that. I’m like, What? Our kids, they totally missed the boat. This is when they were younger. So we realized, yeah, okay, you have to see the flow of money. We actually used a lot of parents saying that exact thing to build Gravy Stack this way. We have 30 patents on the app to show everything related to flow of money and the gaming and banking is one. So it’s all built in in a way where kids are starting to understand, Oh, I made $10 by doing my gigs. I don’t get to spend all 10.

[00:27:24.180] – Scott

Three of them went into save and invest. One of them went into share, and now I have six left. Okay, now next time I need to make $15 or I need to make 25 to cover what I want. That’s a critical lesson learned that most parents forget with their kids. Kids think they can spend everything they get, or they save everything because they’re horders and they’re scared and they’re nervous, right? You’ve got to be able to teach kids about abundance mindset. In fact, our kids in Gravy Stack are about four and a half times more generous than the average kid and all the other bank out there, because with the value creation drive and the gigs, kids are able to be more generous and they give more through that share jar because they know how to create value and have an abundance mindset. That’s powerful.

[00:28:10.140] – Sean

Let’s jump to the fifth module here, which is the Invest. What does the app teach about investing?

[00:28:16.110] – Scott

Yeah. So when it comes to investing, with kids, we basically want them to understand that the eighth wonder of the world, compounding interest. We start with a version of the Marshmello game and delayed gratification. We teach them basically what it means to wait or what it means to be an immediate gratification kid. That’s the first set of games. You have to think long term. It’s a lot of this live like no one else today, so you can live like no one else tomorrow. We teach kids passive income in level five of our game. And then we also teach risk and reward, because you can understand the different types of risk and tolerances out there and the different types of ways to invest. You can start by investing in the stock market with diversified portfolios. You can do ETFs, you can do real estate. And what percentage are you okay with doing each of these? But we want them to really… The first thing you want to do with the kid is to see the mountain of growth over time. It’s like, hey, if you start putting in 10 bucks, 50 bucks a month, by the time you’re here in a decade or two, you’re at the million mark, right?

[00:29:28.180] – Scott

And you want to see that mountain of growth over time. I don’t think kids, until they see it visually, they don’t understand the real value of compounding interest. So it’s critical. Now in our games, and the investing level is not live yet, by the way. So we’re just teaching kids this outside and some of our resources for families. I think we have 30 games live in the app and we’re going to get to hundreds eventually here. But it’s really important for kids to be thinking long term instead of short term.

[00:29:59.220] – Sean

Yeah.

[00:30:00.030] – Scott

Yeah. Yeah. That’s our goal.

[00:30:01.630] – Sean

I was, yeah, very curious to see how this aligns with Tykr.

[00:30:07.120] – Scott

Yeah.

[00:30:07.920] – Sean

I love it. Let’s take a quick commercial break. Are you a beginner investor and want to increase your confidence with investing? Tykr EDU is now live, which includes investing courses. The first course is titled Stock Investing for Beginners, which includes over 60 videos that take you through modules, including Overcoming Myths, the difference between stocks, ETFs, index funds, and mutual funds; investing versus trading; the number one reason why stocks go up and down; knowing when to buy, knowing when to sell; increasing confidence; how to invest your first thousand dollars; and real-life examples. It’s like looking over my shoulder to see how I buy and sell stocks. Simply go to edu. Tykr. Com or go to Tykr. Com and click the courses link at the top of the page. Okay, back to the show. Now, going back to the business here a little bit. You charge seven dollars a month. Is that per family or per child?

[00:31:05.170] – Scott

For the first kid, it’s seven bucks, then three dollars a month for any additional kid. So 10 bucks for two kids. Sure. And then if you pay for the year, it’s like a 15 % discount. And then usually parents make that money back in about eight days, 12 days. And then it’s just like cash flowing from there. But I think that, yeah, it’s a subscription just we can cover the cost of the bank because we have costs for all the accounts and things like that. In the future, we may change that to basically just being like, as you pay kids on payroll, we’ll just charge a buck or two for payroll costs because this is what happens. They do the gigs because that’s the number one win of our app. You have the expectations, expenses, and extra pay gigs. Every week now it’s this automated system. Kids know exactly where to go to complete their gigs, and then they just check it off right there in the app. Their weekly pay dig amount goes up. And then Saturday at midnight, the paycheck goes right from the parent wallet because they hook up any bank to it.

[00:32:04.900] – Scott

Parent wallet funds the kids, goes right through their money machine. They get their debit card. And then Sunday morning, the next print out for the next week is emailed to mom and dad to throw on the fridge, and they can replace it if they’ve changed any of the gigs. But now it’s the system in the home. And then parents go, Yeah, we need to make that a gig. All the time they’re doing it. They’re like, Oh, yeah, we got to make this a gig. Grandparents start calling. They’re like, Hey, I want to get in on this. I want to give them $100 worth of gigs. Here’s 10 things I’d love them to read and learn and watch and listen to and report back what they learned and how they’re going to apply it. What a great way to connect families while teaching this stuff.

[00:32:39.540] – Sean

Yeah. The education, making it very simple and gamified is definitely the way to go. Very affordable product, low price point. How many users in the platform now?

[00:32:51.630] – Scott

Thousands. Yeah.

[00:32:53.200] – Sean

We’re talking 10,000 or less?

[00:32:56.300] – Scott

Yeah. I think there’s probably 2,000 families. Okay. And then we have a huge waitlist of families for our next launch. So we’ve got about 1,000 affiliates, too, which represents about 50-80 million reach. And we’re just launching them one by one, because right now we’re an open beta for the app. We’re not fully like… You can download it and go by listening to this, and you’re going to have a great experience. But we’re not pressing blast to the whole world until we’ve finished more of the levels and switched out some of the tech pieces. We’re moving to React Native and we’re making changes to make the gigs easier for families. You can still get in and go. But there’s bugs we want to work out before we go.

[00:33:39.030] – Sean

You said you’re a bank. Are you using a banking software? I’m guessing you’re using plug to make the connections.

[00:33:48.380] – Scott

Yes, we use plug and then we use Synapse as our banking as a service rail. So we are the front end of the bank, like UI, UX, and then all the banks is stored. Kids are actually getting like three and a half, four % on their interest already on their savings jar. Yeah.

[00:34:07.220] – Sean

I asked that question because we have some more technical people in our audience to be like, are you a true bank? Are you the front end? And it doesn’t really matter from a business standpoint, they would care more about the security. So Synapsys and Plat are both excellent. Yeah. Nice.

[00:34:22.550] – Scott

And then we’re going to have a Stripe plugin as well. So kids, if they’re doing gigs in the community, we just want to make it super easy for them, like a QR code or a simple text link where people can pay directly into their account. So just making it super fast for them.

[00:34:37.610] – Sean

Yeah. As far as marketing, how are you getting this out? I know you’re not putting your foot all the way on the gas pedal, but is this traveling by word of mouth? Are you doing some marketing?

[00:34:47.980] – Scott

Yeah. Our goal is to get our viral coefficient up. That’s why we’re not going big yet. We don’t even have the ability for people to rate us in the app. They can, but we’re not doing any of the sharing and the rating until we fixed all the little bugs in the app. So again, we’re an open beta. So right now, the people that are coming in are just telling their friends. So it’s just been slowly tracking up. We’ve thrown zero dollars at marketing yet. We’re doing our SEO work. We’re doing affiliate generations. So I have tons of partners and affiliates and friends. And then we also have our higher ticket programs. So we have our family money skills course, which is $1,000. Basically, we say $1,000 to help your kids net a million in the next decade. And then that’s our course on dinnertable. Com. So we actually we own gravestack. Com and dinnertable. Com. And dinnertable. Com is where they can get the course and as well as join us in a workshop. So we have parents coming through our workshops every month, where we teach them all the core skills on family legacy and financial skills and really how to crush it with their kids and grandkids forever.

[00:35:56.520] – Scott

So that’s our hire ticket. Yeah.

[00:35:58.500] – Sean

And how many employees?

[00:35:59.520] – Scott

We’ve got about 30.

[00:36:01.490] – Sean

In.

[00:36:01.950] – Scott

Total.

[00:36:03.420] – Sean

And since this is beta, I assume, did you raise a round of venture capital? Yeah.

[00:36:08.850] – Scott

We’ve raised $12 million to build this. And we have our burn rate, we have our revenue rate, we have our milestones. I love the higher ticket programs just because there’s such a deeper value to the families. And if the people do our courses and workshops, they get Gravy Stack included for free. So yeah, that’s the powerful way to do it. Let me just added in.

[00:36:30.220] – Sean

We do the same thing with our courses as you join and you get a tier for free included. Yeah. Yeah. We’re really big on affiliate marketing. I’ve got a lot of experience with channel partners and affiliates. Dive into that a little bit because I think a lot of people out there, especially new entrepreneurs, are thinking about, okay, so I need to promote my business. So right away they think of Facebook ads or SEO or YouTube, and that’s all nice. But where the needle really moves is leveraging partners. So what’s your strategy there with affiliates?

[00:37:04.060] – Scott

Yeah, our number one way to grow right now is webinars. So everybody wants their audience to get this training. So I do an hour long training on family money skills, family legacy, the best strategies or the best families in the world of what they did with their kids and grandkids to succeed. And everybody wants their audience to do that, whether it’s a huge social audience or a big email list or a bunch of clients for a financial group or a law firm group or speaking on stages at masterminds and events. I just spoke at Aspire in San Diego with Dan Fleyshman last week, and I asked the audience, there’s thousands of people. I was like, raise your hand if you learn money skills as a kid. Zero hands in the whole audience. Of course. And I was like, That’s why I’m here. So yeah, that’s the best way to grow is just webinars with partners, and then there’s just a Rev Share. Yep.

[00:37:57.050] – Sean

What’s your percentage?

[00:37:58.570] – Scott

It varies. Usually it’s 10 %. Sometimes we’ll give a higher Rev split on the front end, and then the back end is on us. It depends or 10 % on the whole thing. So yeah, if anyone wants to be an affiliate of ours, just go to gravyestack. Com/affiliate, and they can sign up. And then, yeah, so we’re just bringing in JVs. We do like 10 a month for these webinars.

[00:38:19.230] – Sean

And.

[00:38:19.800] – Scott

I just went live this morning to 900,000 moms on a Facebook group, and I trained them all. And now we’re doing a big webinar to follow up and help them get in and train the family. So I think that’s a great way to go. I think real growth happens in a business when you have customers telling each other like wildfire. That’s why I think so much of that… If you look at Elon Musk, he never spent a dollar on marketing. Hes just built something that was so good that everyone’s telling everybody else, okay? And yes, he used social to grow and move markets and do a bunch of crazy stuff. But the truth of the matter is if you build something that has what we call a viral coefficient, where it’s built in such a way where everyone, like a two to one viral coefficient is one person uses, they tell two. Chatgpt, when it launched, it was a 30 to one viral coefficient, wild scale.

[00:39:12.700] – Sean

Yes.

[00:39:13.880] – Scott

And that’s how it became $29 billion right away because 30 people found out for every one person using it. That is a home run. So there’s a joke out there that’s like, yeah, you only need to spend on marketing when your product’s not that good. That’s not true fully because people need to know about you somehow. But how can you build into your product or service or your system to viral growth? Through challenges, through referrals, through turning your customers into your biggest raving fans and voice, big mouthpieces. So that’s really what we want to focus on here, is doing something that’s so powerful for kids and families that they’re telling cousins, they’re telling their friends, they’re telling their school, they’re telling their sports team. Their kids are getting so much benefit from it that they’re just telling everybody. So that’s our real goal is really focus on product, really focus on your service. If you have a higher ticket, then you should definitely build in a referral system on the backend. Let your customers do the talking. And if they’re giving you bad reviews, well, then fix it.

[00:40:21.320] – Sean

Learn.

[00:40:22.090] – Scott

We want feedback on everything we’re doing. We get over 7,000 error requests a day and feedback requests a day. Because there’s thousands of families in here, but they have a bunch of kids using it, too, and all their family and friends are given in, too. There’s a ton of people using Gravy Stack right now. And we don’t want to go to the 50-100,000 million mark until we’ve turned all of them into raving fans. So it’s been hard because we’re burning the cash. But I want it to be world-class. And so that’s the only way to go. And you can blow a bunch of ad dollars and get your cost per acquisition to a manageable rate. But why would I want to have more errors with 50,000 people? No thanks. Yeah.

[00:41:03.840] – Sean

What is the old saying? If you’re throwing money at a problem, it’s just going to amplify the problem at something like that. And you would just see more bugs coming through your tickets system. You don’t need that.

[00:41:15.290] – Scott

Exactly. So I’d say in January, we’re going to be going big. January, February, we’ll start to go out big to the world, and you’ll start hearing about it all over the press.

[00:41:25.640] – Sean

We.

[00:41:26.540] – Scott

May move this thing. I mean, this is a podcast, so I’m telling you more tech stuff, but we may move this thing to be like a version of just a ledger, like a Venmo and make it simple and make it easier. Our whole goal is to make gigs easy for families to do and expenses easy for kids to plan ahead for and cover. If you get those things right, you’re teaching earn, save, spend, share, invest, all of it, right?

[00:41:53.280] – Sean

Right. Yeah. Before we jump to the rapid fire round, is there one key takeaway, like a first step you could give to parents that have kids that are nearing that age, let’s say, five, six years old, maybe a little older.

[00:42:05.990] – Scott

Yeah. Best advice I can give to younger parents, I mean, this is for all the parents, too, even teenagers. Money is the biggest fight in the home that kids report. So we surveyed thousands of families, and the kids all said, I don’t want to talk about money. It’s the biggest issue in the home. There’s a lot of conflict around it. Parents say things like, We can’t afford this. How much this costs. Money doesn’t grow on trees. You know how hard I work to get you this, and you guys just took it for granted. You blew this, and they see parents stressing over debt and bills. So kids actually don’t want to talk about it. And so the best thing you can do with younger kids is start having money combos, especially with teenagers. Your kids need to know what you do for work to add value to other people. They’ll cheer you on instead of mad at you for doing work instead of hanging out with them. Tell your kids when you’re going to invest in something. Tell them what it is. What’s the model? What’s the return? Why you’re doing it? Tell your kids about how you earn and create value in your work.

[00:42:58.780] – Scott

Tell your kids about every donation you guys are going to make as a family and get their opinions. Maybe they can have better ideas. Start bringing them in conversations. And before they go to bed every night, ask them what value they created for others today. That’s the best advice I got from Sharon Lector. She said her dad did that every day growing up, and it changed her whole life to who she is today. She’s like the godmother of financial literacy. That’s awesome. Rich Dad, Poor Dad, Cashflow Game. She did all that stuff with Robert. So that’s really my best advice for families. And then again, like Gravy Stack, I’m building Gravy Stack for my kids. I got four little kiddos, and this system has been so powerful for us as a family. My kids never ask for money. They know exactly where to go to earn it and create value in the home. No more conflict over chores at all. And they’re finding new things around the house to do and coming to us saying, hey, I’d like to get $12 for doing these four things. We’re like, yeah, let’s go, because they’re like, because I need to pay for I’m planning ahead for this toy I want, or I’m planning ahead for this sports thing or this birthday present for a friend’s party.

[00:44:05.250] – Scott

This is how you get it to start moving.

[00:44:07.460] – Sean

Yeah. Love it. That’s awesome. All right, let’s dive into the Rapid Fire round. This is the parts of the episode where we get to find out who Scotch really is. All right. Let’s go.

[00:44:18.540] – Sean

If you can try to answer each question in about 15 seconds or less. You ready?

[00:44:22.740] – Scott

Let’s go.

[00:44:23.470] – Sean

All right. What is your favorite podcast?

[00:44:26.060] – Scott

I love The Ed Mylet Show. He’s a friend, and his podcast are just killer. My goal is to get on to here pretty quick.

[00:44:35.200] – Sean

I was just listening to him and Alex from OSI.

[00:44:37.850] – Scott

Oh, yeah. Alex is amazing, too. Anything Alex says, he’s like my generation’s Tony Robbins or Sig Ziggler. He’s really good. He’s a stud.

[00:44:47.210] – Sean

All right. What is the recent book you read and would recommend?

[00:44:50.210] – Scott

Well, Other Than Value: Creation Kid, if you got kids, that’s our best seller. It’s number four on Wall Street Journal, so it’ll really help your family set this up. My other favorite book is The Road Less Stupid by Keith Cunningham. Probably one of the best business books I think ever written. Yeah, that one, I mean, there’s so many that come to mind, but that’s one of the best. It’s a playbook. I mean, it’s a manual for starting and growing and running a business. So good. Or the Bible. I read the Bible every day. I love the Bible. That’s probably the best business book ever written. Mark my words. And family book and faith book and attitude book and mental health book and everything book.

[00:45:30.390] – Sean

Wisdom all around. I’ve been reading a lot too, especially with what’s going on in the world as we speak, Middle East. We could talk about that all day.

[00:45:38.850] – Scott

Yes. Oh, man. Yeah.

[00:45:40.830] – Sean

All right, this is a fun one. What is your favorite movie?

[00:45:45.000] – Scott

Shawshank Redemption.

[00:45:46.420] – Sean

Great movie.

[00:45:47.480] – Scott

Or Gladiator or Braveheart. Any of those. Any comeback, underdog like fight through it.

[00:45:53.780] – Sean

All right, here’s a good one. What is the worst advice you ever received?

[00:45:58.730] – Scott

Give up. It’s too hard. Give up. That’s probably the worst advice or crypto advice. But anyway.

[00:46:07.180] – Sean

Yeah, we could go into that, too.

[00:46:09.400] – Scott

I think a lot of people in your life as an entrepreneur, it’s either a jail cell or it’s heaven. It’s a beach. It’s a beautiful tropical beach. And I think you decide. You decide. I think sometimes people are their own worst manager, and they put these pressures on themselves that are just they kill them slowly. And that’s when people in your life just give up. What are you doing? This is too hard. Why are you doing this? Spend more time with your family, your kids. I’m like, I have great time with my family and my kids. I’m doing this for them. But I also want to help 50 million kids. I have a burning drive deep down. So now when people are like, Hey, this is too hard. I’m like, Good. We’re learning along the way more than anybody in the world. And when we overcome, we’ll change the world.

[00:46:54.500] – Sean

Well, I look at it this way, too, is if it’s difficult yet you’re making progress, you’re creating a moat. There’s less people are going to follow your footsteps. It’s too hard.

[00:47:03.460] – Scott

It’s too hard.

[00:47:04.260] – Sean

It’s just too hard.

[00:47:05.470] – Scott

But that’s okay, because entrepreneurs, that’s like the nod of the hat. It’s like we’re going through it. I think the world is built on the back of small businesses and entrepreneurs that change it. Right.

[00:47:16.220] – Sean

You probably like Myron Golden.

[00:47:18.120] – Scott

Absolutely. Atlas shrugged and Myron Golden. There you go.

[00:47:23.710] – Sean

Preach. All right. One more question here we got to jump off, which is what is the best advice you ever received?

[00:47:29.840] – Scott

Tip well.

[00:47:31.120] – Sean

Love it.

[00:47:31.980] – Scott

You can unpack that for hours.

[00:47:34.310] – Sean

I know, Myron talks about use the money to love the people. Don’t use the people to love the money. He tips very well. He’s big on that.

[00:47:42.460] – Scott

Yeah. When my parents dropped me off for college decades and decades ago, my mom gave me a hug. She said, if it doesn’t point to Jesus, there’s no point. She got in the car. My dad shook my hand and his hand was a $50 bill. He said, tip well. And it’s really what it is. It’s an abundance mindset. It’s a generosity mindset. It’s a giving mindset. Like the pie gets bigger, the more we solve problems and help other people get what they want and need. It’s as simple as that.

[00:48:11.670] – Sean

All right. And one last question here is, where can the audience reach you?

[00:48:15.880] – Scott

Yeah. So just I’m Scott Donnell on any socials. We can give you the links for show notes. And if they want to download Gravy Stack, we’ll give you the link as well. And then they can just type in dinner at 30, and they got a free month. And if they want to come to a free training like we’re doing, we do webinars all the time for family legacy and training kids. And if we can give you a link to the next one as well, and they can come in and listen more and learn more. Our whole goal is making these things operational in the home. If you don’t act on it and do anything with it, it’s useless. Those are probably the best ways they can find me. And then the book, they can just grab it on Amazon, Value Creation Kid. There you go.

[00:48:53.650] – Sean

We have all the links and our show notes, but thank you so much for your time, Scott. This is great.

[00:48:58.220] – Scott

Oh, I forgot one more thing. We have a show called Smart Money Parenting. We do it every three days. There’s an episode. It’s 15 minute bite size things to help families. So Smart Money Parenting, it’s like a top five parenting podcast. So they can find that if they’re on Apple Podcast right now, just go search at Smart Money Parenting.

[00:49:16.450] – Sean

Sweet.

[00:49:16.780] – Scott

All right, Scott, thank you. Thank you.

[00:49:19.440] – Sean

We’ll see you.

[00:49:20.450] – Scott

Bye.

[00:49:20.710] – Sean

Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts out there you could be listening to, so thanks for spending some time with me. And if you have a moment, please head over to Apple Podcasts and leave a five star review. The more reviews we get, especially five star reviews, the higher this podcast will rank in Apple. So thanks for doing that. And remember, this show is for entertainment purposes only. Only if you heard any stocks mentioned on this podcast, please do not buy or sell those stocks based solely on what you hear. All right, thanks for your time. We’ll see you.