Footprint raises $13M Series A led by QED Investors. Read more

Eli Wachs
Eli Wachs

Investor Update

May 1, 2023

13 min. read

Binary Thinking (Update #15)

Dear Footprint Family,

April was a great month for Footprint. We finished strong, landing multiple customers in the last week. One of the companies already will be using us for onboarding, PII vaulting, and card vaulting. We are thrilled they will be choosing us due to our core value prop: frictionless onboarding that offloads the cost and compliance risk of storing sensitive data.

Another new customer will be replacing VGS with Footprint as well as using us for a hosted onboarding. A member of their C-Suite messaged me this: “There’s really no interoperable platform for this kind of data today, and seems most companies are still just realizing they need to control it themselves first, let alone send it elsewhere (yet).” I’m really glad to see the product resonate like this. Our vision of Footprint is more than just KYC/KYB and PII/Card vaulting; Footprint’s goal is to be the platform to onboard users and then connect their data to wherever you and they need it to go. This empowers both companies and users to make the decisions right for them.

As always, there is a massive amount of work ahead to now delight these customers and the new ones we will bring on this month. We couldn’t be more excited to do exactly that.

Monthly Essay: Binary Thinking

Normally I write my updates in two big sittings. One is for me to get out the idea I’ve outlined, and the other is to edit. I know—crazy, inventive process I have here! Last October in Vicissitudes, that style felt wrong. In that update, I tried to move my way of thinking from derivatives to integrals. The idea was that I would often define how I felt based on a day’s events instead of the totality of moments in the weeks leading up to any given day. In wrestling with that idea, I realized it was half-embraced in my mind. An ideal. A beacon that sounded nice in theory but I had yet to put into practice. It started with my idealistic ode from that August and concluded with my more honest highs and lows of the month of October.

Perhaps in a nod to my lack of progress there, I decided I would adopt a similar structure here. Author’s note: we closed three customers in the week between the 23rd and the 30th, and I was dumped the week before the 23rd (a very short and unimportant relationship that I can’t believe is getting a shout-out in an investor update), but I think it is only fair for me to give the derivatives that I’m sure influenced my writing. This is an update I have been thinking about since last Fall. And I guess the only fair way to present it is through two binary lenses.

April 23rd
In December, Rex Woodbury asked me what people aren’t paying enough attention to heading into 2023. Based on the responses from the other 39 people he surveyed, I don’t think I read the prompt with proper diligence. Here’s what I said:

That we are falling into binary thinking. In 2021, companies were told to walk into Fort Knox to raise as much as they want because everything went up; in 2022 we were told to become profitable by next month at the latest. Both mindsets are wrong but also contain some truths. Perhaps that is a paradox, which is more difficult to live in than black-and-white philosophy. But I worry tech will lose its spirit if we are all susceptible to the same binary thinking.

I was proud of that response, though I had no clue what I meant. However, my answer was a good lead into my main philosophical New Year's Resolution for 2023 (I bucket my resolutions into categories): become less of a binary thinker. Admittedly, this was more so for my relationships. Though perhaps this is because I often refuse for negative thoughts to permeate my Footprint head, so I project them into other facets of life. My best friend fairly called me out for telling him one day I was heartbroken and would never recover, and the next that I had completely moved on, learned a lesson, and was better than ever. I am a very binary thinker. As I wrote last month, I’m also a stubborn one, yet one open to having those beliefs quickly changed.

This reflection is in part inspired by two articles on the topic. The first is in Atmos about Transcending Binary Thinking. The author gives an analogy to a rock skipping on water, and the aftermath:

Concentric circles—ripples—begin to radiate from that original point of action. Each ripple is a small wave consisting of a crest and trough, which the logical mind of binary thinking views as opposites: the highest and lowest points, each essentially meaningless without the other. What emerges is a metaphor for how we perceive the entire universe, in oppositions: with life came death, with day came night, and so on.

Normally I’d analyze this before introducing the proposed solution, but I actually think here it is better to work backward. The author says this is a world of opposites until a third option is mentioned: “While the logical mind sees the crest and trough of a wave as opposites, the universal mind remembers that it’s all just water.” To me, this means transcending binary thinking does not mean we can’t see opposites, but rather viewing them in the same ecosystem. But I am also aware that those words are philosophical jargon I once again have no interpretation of, so let’s dive deeper.

By mentioning that Jung had also studied the topic of balancing opposing views in our mind, the Atmos article sent me down a bit of a rabbit hole. Jung coined this practice as enantiodromia. which he further defines in Psychological Types as “The emergence of the unconscious opposite in the course of time.” This led me to an article by Oswald Kyree, who tied Jung’s view on enantiodromia to the shadow self.

Oswald writes that enantiodromia is meant to bring us back to equilibrium. He says that instead of “resisting this inevitable occurrence, we should learn to harness it.” The ensuing argument is fascinating: we should anticipate our own binary swings, and almost bring them on in a controlled fashion before nature does. Oswald says that:

“When we’re being unnaturally calm for too long, our shadow might be accumulating emotions like dismay or worry. We should acknowledge these opposing emotions. After all, when we’re keeping our emotions in check, these emotions don’t disappear. They still exist in our subconscious like a ticking time bomb, ready to explode at a moment’s notice.”

More concretely, Oswald argues if we’re being brave, we may be building up a debt of fear. If we are submissive, we are contributing to an eventual debt of self-rebelliousness. He argues that we must self-regulate out of our own volition before the binary blow-up occurs. Perhaps similar to controlled burns done in California forests to prevent forest fires.

That self-regulation is perhaps how you win the Stockdale paradox, named for US Admiral Jim Stockdale who was a US POW in Vietnam. Admiral Stockdale survived the war, saying he “never lost faith in the end of the story.” However, he says the most ardent optimists he encountered were the ones who ultimately died. In Sahil Bloom’s analysis of this anecdote, he reflects: “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality.”

To me, binary thinking is a lack of regulation. I am often culprit number one. As I wrote in Vicissitudes, I often let the most recent derivative dictate my mood despite my desire to live life as an integral. Gray areas scare me. I am so determined to rationalize my decisions or thoughts that I seek an answer to tell myself instead of discovering my truth.

Binary thinking is an ultimate paradox to me. Our superpowers can be our kryptonite; our fears may be our cure. I’m an unrelenting optimist. In the Stockdale paradox, my default state is top right. But this means amidst all of my hope, doubt builds that I never address. I am very bad with being vulnerable about Footprint. Doubt is defeat—quite literally. If we are not selling possible customers on features yet to be pushed to prod, we won’t win a deal. If we don’t have momentum now, it will never build. I don’t lie; I anticipate our ability to execute and think we need to do whatever it takes to get the wheels to spin. And as I speak with more conviction—with my binary declarations that we can do it, and we will land that customer—my shadow self is unbeknownst to me writing an essay to me in the dark expressing an opposite view. I don’t see it. Until I fail at something. Lose a pickup basketball game in the park. Have a date go poorly. In that moment all of the unchecked doubt and fear volcanically erupt.

As I have thought about this update for the past few months, I realize I may have thought about it wrong. And my response to Rex may somehow be a decent encapsulation of how I feel here. Opposites are not strange dichotomies, they are natural partners. I schedule everything in my life in a calendar to promote productivity and order; yet my favorite days are the ones when I get lost on a walk with no plan in sight.

It is not that binary thoughts are bad. But I think my approach has been off. My personal philosophy of regulating mood was as follows: I’m a naturally very happy person. If I had to guess, I’d say 93% of my days I feel great, 1% are neutral, and 6% I feel bad (there was no science or data behind those numbers). I say I don’t question my happiness and would rather just enjoy it. The same probably holds true for Footprint: most moments I am beyond confident we will conquer the world; then every once in a while I question the reasons that our customers felt confident to take early bets on us.

The more we live in our dreams, the tougher reality is. Dreams are nice; they can give us peace of mind over things that rationally absolutely should make us restless. In a way, awareness is scary. Awareness is complex; facts are not to be manipulated. The contortions of them are just safer dreams. The majority of my journal entries are from the aforementioned 6% of bad days. And most of the rest are from the best of the good days. They are binary thoughts. I’m afraid of non-binary answers and not having an answer—these middle areas scare me.

I used to think a healthier outlook would be to write more from the neutral area. Now I think it is to regulate the very good days. Not to kill spirits. I think wins should be celebrated, perhaps unquestioningly. But after a good week, maybe we should reset a bit. Perhaps I should write down the few things that are bugging me. I wrote last month about failure as a strength. As an extension, there is a lightweight exercise to that. In a week where things go well for Footprint, write down the things we need to fix in the company. Even writing this feels weird. I’ve always thought that if it is sunny there is no need to bring out an umbrella (this probably makes no sense, once again because I don’t understand idioms and I guess an umbrella could be nice in the sun for shade). If my binary feeling in the moment was good, that was great. I’d let whatever the opposite shadow form and build – and deal with that later. As I wrote in Vicissitudes, perhaps I chase this roller coaster.

By reaching a similar conclusion—just through different sources—as I did in Vicissitudes, I guess I haven’t done a good job implementing changes here. I love my default binary state. But I can no longer just let it be blame-free. It is not that I am tired of my hope, optimism, tenacity, or order. I’m just tired of letting the other end of my thoughts emerge like a submarine that I didn’t see coming. I am so hopeful it feels so strange to write encouraging us to question our own good priors at times. I feel each time we feel down it makes us stronger. But I also think I just tell myself that. Maybe we don’t need to go there. By being aware of our spectrum, maybe we can find an equilibrium that is more sturdy.

I really don’t know if this is good advice. Maybe controlled burns won’t help when the fire comes. Maybe this is another attempt by me to find answers to emotions no one will ever fully conquer. This update feels vulnerable and incomplete. It feels a bit off. And at the same time, I think that level of uneasiness it generates is perhaps good in light of all this. Seeking out that disruption to the status quo under my terms could possibly train me to better handle such changes when they are brought about by others.

April 30th
Before I start part 2 here, I am curious how many brave souls made it this far in the update. If you did, could you please reply to me with your favorite picture of a penguin? Back to the update

It is remarkable to me to read what I wrote last Sunday on a plane to San Francisco. A fun dalliance masquerading as a philosopher to find meaning in an acceptable few days of doubt. It is easy for me to sit and critique my own thoughts. I was stressed. We hadn’t closed a customer in a few weeks. I wasn’t clairvoyant enough to envision the next week. One other note—you don’t win the Stockdale paradox. I acknowledge that it can be problematic that I view a thought experiment as a zero-sum game.

But I’m not going to edit my entry from the 23rd. It is probably more right than I give it credit for now; my ensuing critique probably has less veracity than I think as I smugly type it in bed. In a low moment, it is probably good to ask if things are actually bad. During highs, I find it almost too easy to say they feel better because of the necessary lows. I find regrets conceptually stupid due to the inability to change them. Regrets are to be minimized at all costs. My favorite way of doing so is weaving them into a narrative: the lows led to the highs. In fact, they made it better and were part of a bigger journey.

Momentum is real. I am a bad sleeper. One bad night of sleep often spills over for days until I stop it. A good sales call on Monday carries to Friday. When I read my writing from last week, my self-diagnosed statistics stand out. Why would I ruin 92% of the time? The 6%—if the number is even that—is a necessary evil. I mean it. I read the words of a boy who was tired of being strong and brave. I see Jung’s prophecy play out and can imagine Oswald’s disappointment at someone who had collectors come to receive payment for an overdue debt of incompetence and fear. It must be paid.

But I’m already smiling nostalgically looking back at the past few weeks. Yes, the incredibly strong close to the month helped. But the momentum started for me last Monday morning. Alex and I were in Palo Alto for meetings. Sipping a Tiger Spice Latte at Coupa Cafe, feeling the sun on my back, I awoke from the ephemerality of my doubts. I was a student again, reading whatever I could find about privacy laws. Something about the Bay will always make it the most special place for me in tech. I finished my drink and told Alex we were going to have a big week. My debt had been paid.

This is my essay about binary thinking. After five months of thought, I think it just served as my catharsis for a rough week. I am trying to get better at sitting with emotions. I told someone on the 23rd at brunch that I was ok, but trying to sit with emotions for once. I think people are jarred when I am not solely emanating smiles. This Sunday at dinner, the same person said I seemed back to normal and then some. Was it the customers? Was it necessary?

It rained last weekend in NYC. That is objectively true. Yet it didn’t feel melancholy. That is my interpretation of events. I’m not sure what to make of this. It is far too long. A rambling journey to nowhere. And it seems I am rejecting my own advice, choosing to build up that debt again. But from day 1 I promised transparency. Not just the buttoned-up story. I also promised polished thoughts. But after close to half a year of mulling over how to write about binary thinking, it was time to publish this. And one could argue these are not opposing viewpoints. But like that ripple in the waves, perhaps the two parts are linked in one.

Wishing everyone a great May.

Goals From Last Month

  • Continue pace of adding at least one customer/month since going live. Our goal going into the year was to end the year at double digit customers so this would continue us on path. ✅
  • Bonus—a great article by Alex on our recently launched vault proxy

Product From last Month

  • Launch KYB in sandbox ✅
  • Build KYB with automatic beneficial owner links — no more typing PII on behalf of others when verifying your business ✅
  • Improve our admin sign-up experience: new customers in sandbox are guided through creating their first onboarding configuration and verifying an identity ✅
  • Our goal with this was that > 70% of users who enter the sandbox create an onboarding flow and vault an identity within five minutes. There is a lot more data to track here, but it was great getting on a zoom earlier this week with someone who before the call signed up and did just that.
  • Get ready to launch KYB publicly in May ✅
  • Make significant progress on our new App clip experience ✅

Hires from last Month
Amanda Lee (Product Engineer): Amanda grew up in Shanghai and will be graduating from Brown University this May. Prior to Footprint, she worked on ML at Apple and fractional trading at Robinhood. In her free time, Amanda loves reading anything about venture capital or American art.

Lucas Gelfond (Product Engineer): Lucas is finishing his Bachelor's at Brown, where he studies computer science and an independent concentration in art and technology. Most recently, he was an engineering intern on Substack’s growth team, where he shipped experiments totaling more than $500k in incremental ARR, and support for LaTeX equations in posts. Previously, he taught in Brown’s Socially Responsible Computing program and was a Coding It Forward fellow in the NYC Department of City Planning. Lucas is a Neo Scholar, and also writes nonfiction in his free time, most recently for VICE, Dirt, Logic, and Reboot.

Goals For this Month

  • Publicly launch KYB
  • Publicly launch our Card Vaulting & Components APIs
  • Alpha version of our App Clip experience

Where we could use help

  • We are looking to hire a senior/staff Frontend Engineer (bonus if fintech experience)
  • More generally, we are looking to hire an engineer (could be backend or frontend) with meaningful payments experience (such as time at Square/CashApp/Plaid).

Company We Are Looking for Intros To:

  1. Uhaul
  2. Line
  3. Backer
  4. Best Egg
  5. Jenius Bank
  6. SecureSave
  7. Spiral
  8. Greenwood
  9. UNest
  10. Tradier
  12. Archway Software
  13. Altro
  14. Altruist

Subscribe to our newsletter

Receive updates on new blog posts & investor updates