How Blacksteel Collected Over 10k Leads With $10 a day

Josh: Hi everyone, I'm Josh Ledgard from KickoffLabs. With me today is Brandon Stokes and his project is a premium rewards card that uses income instead of credit score.

Josh: I'll let Brandon get more into that but before we talk about this product, Brandon, I want to know a little bit about you. Could you give me some insights into your background, a techie, are you a marketing guy? Where did you come from before you started this business?

Brandon: I originally, after college, I went into investment banking so I was banking, wealth management side, transitioned out of that career into more Corporate strategy roles out in the lay. And then about four years ago, I had a classmate who was a techie, we ended up starting a company a couple years ago together, got to know Y Combinator, did that whole spill and then that company ramped down during the pandemic. So, I started working on this about the beginning of this year, 2021.

Josh: So, you were in Y Combinator?

Brandon: Yes.

Josh: And so, one of my questions is always, if you've had any failures leading up to this point, would you consider that... Did that not go how you guys planned? You said it ramped down so how did your exit go from that?

Brandon: Yeah, so the pandemic happened. My previous startup that we went through YC was a membership platform for bars and nightclubs so we're in the payment side for bars and nightclubs and when the pandemic happened, we thought it was only going to last a month but it just continued to lag and we had just got cash flow positive at the time, made a bunch of hires, started to kick off our seed round, the pandemic happened right at the beginning of that and we just couldn't weather the storm, to be honest. And a lot of our partners didn't weather the storm as well so we had to go back to the drawing board and he spun off and doing his own thing now and I started Blacksteel.

If you're creative and I think you're really truly built for entrepreneurship, you'll always think of another idea.

Josh: Cool. And what would you say you learned from that, other than don't start a product aimed at bars and nightclubs especially during a pandemic?

Brandon: Perseverance, really, I think as any entrepreneur, you just can't get discouraged. I think if you're creative and I think you're really truly built for entrepreneurship, you'll always think of another idea. And even during the pandemic, my co-founder and my old co-founder and I, we even started a Callbot for unemployment agencies that gave us some money to weather the storm, just personally to survive, so it was just about persevering.

Josh: Cool. Let's talk about Blacksteel. So, you ramped off of what you were doing before and how did you come up with this idea and give us some more background on this idea?

Brandon: Yeah, I've always have a bunch of ideas and I write them down on a notebook. This is an idea that was near and dear to me because back when I was working in banking, I always saw, at least I never worked on a lending side and the commercial side so much but obviously, issues with credit and I always felt the credit system was outdated and didn't necessarily work for new generations.

Brandon: Millennials and Gen Z come out of college with a lot of debt. Some of us get pretty good jobs. And my personal story was my first job, I made 13.50 an hour. I had a 760 credit score, a credit card company gave me $8000 for a credit limit, which is totally irresponsible because I had a good credit score, they overlended.

Brandon: Now, I come out of college at the time, my parents had some impact with student loans, but I got a banking job. So I'm making $100,000 and I can't get credit because my credit score is at an impasse so it's, I have the cash flow now, but they won't give me credit, back when I didn't have the cash flow, they overlended. So I just feel the credit system was just a little outdated, wasn't dynamic, provided a little too much confidence. It just wasn't being real with people's needs are today.

The first step was just socializing the idea...Talking to people to see if it's something they want and tapping into some investors.

Josh: You always hear the story similarly as people, "Oh, you've never had credit before, so we can't give you much credit because you've never proven a history of paying back credit." And you're, "But I didn't need it. Now, I want a loan for this other thing and you tell me I can't get this loan." And it's always been backwards that way, so that's a fascinating concept.

Josh: And so you had this idea, you wrote it down, you said it was near and dear to your heart, but how did you go about saying, "Okay, this is worth me putting my time." Because your time has a lot of value, you're at least working in the banking industry, you know can get a really good job. What makes you say this is where I'm going to spend my time?

Brandon: Yeah. So I think it's two methods. So one, I'm really deep in entrepreneurship because I've done the whole corporate thing and I just feel like it's risky to stay in corporate America as opposed to just taking a bet on yourself in the beginning. The other thing is I just looked through a process. So I have this motto of start before you're ready. And so I wasn't necessarily ready to start this, but I just had to start it. So I went through it with stages and steps.

Brandon: The first step was just socializing the idea, right? Talking to people to see if it's something they want and also just tapping into some investors and just brainstorming with them and also reaching out to some other FinTech founders, just learn the space, see who they're working with.

Brandon: And then I went through that step. I talk to investors, they're, "Oh, this is a pretty good idea." Okay, "What do I need to do in order to get this thing off the ground?" They gave me some steps what to do, talk to other FinTech founders, got some insights about the industry. So you had to understand what type of partners they love, what the business models were, what the costs will be, right? Put that together.

Brandon: And then just really created a simple website to test the idea, right? So created a website, looked at some referral campaign companies, saw what you guys are doing, implemented you guys and started socializing the idea and getting the demand.

42% of the people that are coming are from people sharing the links that are generated by KickoffLabs.

Josh: If you don't mind me saying so it says right now you've collected almost 10,000 leads so far for this campaign, which is ongoing. How long you've been running the campaign in earnest?





Brandon: I really started kicking up the campaign into June so about six weeks.

Josh: So about six weeks and looking at the campaign, what I like about it, and I'll share with some people, your conversion rate is well above average. So you're seeing a 45% conversion rate of people coming to the website and that's a really outstanding conversion rate. And you're getting almost half so 42% of the people that are coming are from people sharing the links that are generated by KickoffLabs and so we know that one person is referring other. And both of those things, tell me two things.

They're coming to the website and they're converting..and not just that they're really into it.

Josh: It's really great idea validation because what you're saying on the website is working for people. They're coming to the website and they're converting and not just that they're really into it. They're saying, "Okay, I'm going to tell some friends about this as well." And people don't generally do that unless they're also really into the product.

Josh: And so tell me about what you're doing to encourage people to refer their friends? Tell me about the referral campaign you set up?

Brandon: I actually played around with a few different things, but the first thing was I had to one, understand what my LTV is, my Lifetime Value of a customer is to understand what I could potentially afford to give away. I realized that in the beginning, I can create some demand by giving away incentives. I have three incentives right now, the first incident is a $30 credit to your card if you were to, for you and whoever you get to sign up so that really kind of kicked up. I think my referral rate was maybe 10% at the time and it got to the amazing number it was when I added that $30 credit thing. I can afford it, my business can afford it so it made sense.





Brandon: The second thing is moving up the wait-list. So because of the nature of the business, I'll have to issue cards in batches. And so there's a lot of people who won't get them until later on. So the more you refer the more points that you get, the higher you will move up on the list. And then the last thing is just offering a really premium metal card. I have a very premium, really heavy metal card that I can issue out and offer if somebody refers more than 10 people. And I have a lot of people that refer more than 10 people just to get that card so yeah.

Josh: Cool, yeah. Those are pretty straightforward rewards. And so I skipped the part where you're getting people to the website initially. So you've done a great job getting referrals and we talked about the motivation for that.

it's amazing that we got the traction we've done with just Instagram. But I've run a few Instagram ads, it's been 10 bucks a day so not another crazy amount of money.

Josh: How have you been marketing the product? Outside of KickoffLabs because every great campaign you always have to seed it with traffic. I would say KickoffLabs is great for if you spend a $1000 worth of effort in marketing, we want to make that worth $1,300 and so it amplifies what you're doing, but it's never just only what you do. And so what are you doing for that first $1000 of effort in marketing that really is driving the campaign?

Brandon: Yeah, so there's really only Instagram. I haven't really done the best job with any type of PR yet. I haven't even kicked up PR so it's amazing that we got the traction we've done with just Instagram. But I've run a few Instagram ads, it's been 10 bucks a day so not another crazy amount of money.

Brandon: I also started using our... We created an Instagram page and so we're starting putting out pretty engaging content. And then also just following the right people, engaging the right people, messaging the right people on Instagram. So yeah, that's really a 100% Instagram right now and I need to kick up a PR situation. I just haven't had time to put the time and effort into PR.





Josh: I think some people have really a lot of success initially engaging PR once you hit that line, fairly soon you'll hit that line of 10,000 people. Once you've got that 10,000 number, then you'll be able to pitch the story and be, "Hey, I got 10,000 people with hardly any effort on Instagram." And that's a great PR story people love to hear and report on.

We're getting about maybe 200-300 people a day coming from those ads.

Josh: So let's dig into the Instagram thing a little bit. So you said you're spending about $10 a day on advertising. Do you know roughly how many people a day are coming from those ads?

Brandon: Yeah. So we're getting about maybe 200-300 people a day coming from those ads. Our reach is a couple of thousands. And so yeah, we're doing just story and end feed ads.

Josh: How did you go about targeting the people in the Instagram ads?

Brandon: Well, so because of the credit space, were limited as far as how targeted we could be because we're financial product. So they want to avoid any type of scams and risks like that. So unfortunately we're at a disadvantage just about being really specific with the targeting. We just have a very generic financial product target.

Josh: So they have a really generic, people are interested in financial products?

Brandon: It's 18-65 and that's about it. That's all I can do is financial products- [crosstalk 00:11:39].

Josh: You can't really get specific about location, about, "Oh, these people also like an American Express or things like that, you can't do anything like that?

Brandon: Facebook doesn't let you do that.

Josh: Interesting. One strength of Facebook and you can't even use it.

Brandon: Exactly.

If I can get eyeballs on my page in any way, whether it's direct messaging them, liking their photos, following them, seeing who's liking similar content that usually converts pretty well too.

Josh: So then that's a great number a day, a great return on the $10 a day despite the lack of premium targeting.

Josh: You also mentioned something that I hear a lot, which is reaching out to specific influencers and other people on Instagram. Can you tell me about that personal engagement that you guys are doing on Instagram?

Brandon: I will say that I haven't reached out to any influencers just yet. What I've done is, I've been able to follow similar accounts. Accounts based upon credit, financial wealth management, right? And just literally... Not necessarily spam it, but to see who's liking their content and then have direct contact with that person, right?

My early startup advice is do things that don't scale.

Brandon: So I'll message that person or follow that person or like some of their content on their page, just to get eyeballs. Really I just need eyeballs on my page. If can get eyeballs on my page in any way, whether it's direct messaging them, liking their photos, following them, seeing who's liking similar content that usually converts pretty well too.

Josh: So you will go online and find somebody who's not really an influencer per se and find somebody and you'll like some of their content, you might reach out to them if they like a piece of your content back and you're just starting to have those conversations?

Brandon: Yes. One of the things that... My early startup advice is do things that don't scale, right? So I'm doing a lot of unscalable things right now in the beginning, just to understand what the feedback is from our product because I like to.





Brandon: Another thing that I do is I call 10-20 people every day that sign up for our product. So I try to reach out to them and have conversations with them. So I'm doing really unscalable things just kind of learn. And I realized too that encourages them to share my product more.

Josh: Absolutely.

Josh: So I want to talk about two of those things. I want to go back to, you start a conversation with somebody on Instagram. People ask, "Well, what do I say if I reach out to somebody online?" You don't want to be spammy, so you don't want to reach out and be, "Hey, come onto our website and sign up." Do you ask them a question? Tell me how that conversation typically goes?

Brandon: Yeah, I'm to say, "Hey, I saw that you liked this credit karma page or the comment about credit or flushers with credit. We have a product that we developed, if you can take a look at it, see if it might fit your needs, that'd be awesome, right?" Something like that, right? Or I could ask them a question, "Hey, are you having trouble with a credit card? We might have something that can help you."

Josh: Yep and now the next stage is that followup where you say, you're calling 10-20 people a day that sign up. So these are people that have given their email address and you at the next stage ask for a phone number.

I believe if you have a good product and you tell a good story, if you relate it to me, it'll be remarkable, which means I'll make a remark about it.

Josh: And so then how do those conversations go? Is it about you learning about their needs for the product? Or is it about you convincing them to share with other people? Obviously they both are related.

Brandon: I do less convincing to share with other people. I believe if you have a good product and you tell a good story, if you relate it to me, it'll be remarkable, which means I'll make a remark about it. So I was just asking questions like What their needs are? How they feel about it? Is there anything that they don't understand, right? Is there any clarity that we're not giving? So we can make sure that we're pretty clear as far as what we need to display.

Brandon: What parts about what we're offering stand out to them? What's the thing that drew them in? So we know what to double down on that. I think those are... It's really just more insights for us. We need unique insights about our customer. Also too, where their income... Understand financial profile of them and see who they are.

Josh: So would you say the people that are signing up, do they match the idea of the profile you had when you started doing this? Or are you off? So are you getting valuable signups from the ads?

Brandon: Yeah. I had an initial assumption, which would be a lot of Gen Z, millennial people who just got good jobs. It might've been coming from a minimal wage or a low paying job to a higher paying job and now they're trying to get their financial stuff together. But I think I was a little bit more shocked by the higher income.

Brandon: There's a lot of high net worth people or higher net worth who have a lot of savings or that had the income and those are typically your entrepreneurs or creatives, where they make a lot of money in batches, but it's not pretty consistent. They're outside of the traditional credit model where they have heavy savings, a lot of money in the account or heavy assets, but don't necessarily have the income.

Josh: Yeah, interesting.

Josh: Just to circle back on that. So you'd say you're getting a lot of qualified leads signing up for the-

Brandon: For sure.

Brandon: One thing that our sign up flow is a little more insensitive because we're not just asking for email, but we're asking people to pre-qualify. So we're asking for their name, phone number, their estimated bank account balance, their estimated income. We're doing all that stuff as a full sign up so.

Josh: I went through and signed up, but I didn't take that second step. What do you do with me on the email list? So if I signed up, but I didn't take that second step of filling out the full application, do you have a followup flow that goes through to convince people to take the second step of filling out the application?

Every couple of weeks I try to engage with everybody

Brandon: Not yet. So that's something that we actually just implemented that. I saw that we were having a drop off in the form. We're having some drop off, not a lot of drop off. We had some drop off where people put their email addresses and then it dropped off.

Brandon: So right now I just [inaudible 00:17:34] with those and then you'll get put into whenever we do a reach out email. Every couple of weeks I try to engage with everybody so what happened to that.

Josh: Cool. So you do have a plan. You are going to try and follow up with people to get more follow on applications filled out because it is... You're right because you need more information than my email address if you're launching any card or credit product or financial product. Cool.

Put something up and just start socializing to understand what the demand. You will either get validation from customers and or investors that might invest in the product.

Josh: What advice would you give somebody who's thinking about starting up in the financial space like you're doing? What, something would be advice specific for them?

Brandon: I think the process that I went through is pretty good. I think a lot of people think they need a lot of money or whatever to get started and you can start floating your idea pretty easily. Put a website up, put something up and just start socializing that you want and to understand what the demand is and you will either get validation from customers and or investors or other people that might invest in the product.

Brandon: I've had investors reach out to me just from seeing an ad or word of mouth. I think the first step is to socialize the idea, validate it to make sure it's real.

Josh: What's been the hardest part for you about this campaign so far?

The worst thing people do is they set up the wait list, they get 10,000 people and then they don't contact them at all for six months.

Brandon: Campaign? I think the campaign isn't necessarily the, it was pretty... I think all the marketing campaign effort is pretty easy. I think for me, I'm not a super, super extroverted person. So it's just consistency of keeping people engaged along the way, right? And because our business is very capital intensive and it takes a while for us to raise the capital, get to keep people encouraged while they're waiting, right? And so it might take another six months for us to launch and during that period, we want to make sure people are still excited about it and still referring it and keeping them engaged on this wait list. And they don't get frustrated and be, "Yo, where's my card at?" We're a startup and we're going to keep going.

Josh: That's just a generally a best practice too. The worst thing people do is they set up the wait list, they get 10,000 people and then they don't contact them at all for six months. And then six months later, honestly I forget about... I do sign up for a lot of wait lists, given what I do, but six months later, you're, "What's this random email about this launch thing? What did I sign up for?" But if you're engaging them along the way, you might have some people drop off, but the people who are really interested are going to be, "This is what I've been waiting for. I can finally get in."

Brandon: I think there's two things that really stood out (about KickoffLabs). One was just how I was able to customize it and implement it to my existing flow. So being able to put you guys on the very back end and customize exactly how we want it to look and feel was really big.

Josh: What's the best part of KickoffLabs for you?

Brandon: I think there's two things that really stood out. One was just how I was able to customize it and implement it to my existing flow. A really key component is, I wanted it to fit with... We have a pre-approval process that we want to do, which is pretty integral as far as the type of information we collect. So being able to put you guys on the very back end and customize exactly how we want it to look and feel was really big.

Brandon: And then also too, the way you guys do pricing is just much better. I don't understand how a lot of these other competitors, they shouldn't even exist the way they do pricing. A lot of times we're doing referral campaigns because you're starting out and the last thing you want to do... I have no problem paying per use, somebody signs up I'll pay, I'm not going to pay a ridiculous monthly subscription for the same, I don't know. Pricing was just honestly, didn't make sense for a business.

Josh: It's the back end integrations and then the pay per usage model that we lean mostly towards yeah.

Brandon: For sure.

Josh: Cool.

Josh: What's the next stage for you guys? You mentioned earlier, getting into PR, you mentioned continuing raising capital. What is the next stage for your business?

Brandon: Yeah, so there's actually two fronts. I'd say a couple of things that we have toward the end of the year. We're closing out our pre-seed round next month. Fundraising, PR, I'm bringing on a few more people to the team. So I have some strategic hires that I need to bring on. Some of our investors signaled that in order for us to raise our next round of capital to get towards launch, we should bring some strategic hires. That's really... Strategic hires, fundraising and more PR, marketing. I want to 10X, this number that we have in KickoffLabs by the end of the year.

Josh: Ironically, I think for some people it's easier to get from 10,000 to 100,000 than from zero to 10,000.

Brandon: For sure.

Josh: Once you've got that seed, you can do a lot more to leverage those people along the way. I think you're going to get there for sure.

Josh: A couple of random questions, to follow up at the end. So for you, who's somebody that's inspirational for you in your life or your career?

Brandon: Inspiration? I find inspiration a lot of different places. I could be generic and say my mom, right? My mom she works way harder than I do, I get my hustle from my mum. Mum's always been an entrepreneur in the real estate gang, she's always been killing it so that's the inspiration.

Brandon: But also just my friends, I have a really solid group of friends who are all entrepreneurs and hustling. When I see them win, it makes me want to win even further. So I think you want to surround yourself with the right people that are just as motivated as you to achieve things and make an impact to the world. So, yeah.

Josh: Especially in this last year, where everybody has been, over a year now people have been working from home. How do you get into a zone of working when you're surrounded by everything in your home?

The people who are winning are getting eight hours of sleep, they're working out, they're taking time off with their family, they're enjoying their friends, they're going on trips, they're doing those things and also working 50-60 hours a week, but then making sure they're taking time for themselves.

Brandon: Yeah so I'm very routine. I have a very, very structured routine day. And so I try to stay in my routine if as long as I get to my routine, I don't have to think about it as much, right? I think I try to... Growth is a make... This thing that I learned about, growth is about making things easy. So I really just try to make things as easy as possible. So I don't have to think about it, I can just do.

Brandon: The other thing is I take time off, I take time away, right? I think as entrepreneurs, we get so used to just hustling, hustling, hustling. There's a great talk in YC that, "The people who are winning are getting eight hours of sleep, they're working out, they're taking time off with their family, they're enjoying their friends, they're going on trips, they're doing those things and also working 50-60 hours a week, but then making sure they're taking time for themselves."

Brandon: So I take a lot of time for myself to reflect. I'll take the weekends off. I make sure I spend time and talk to friends, I go to the gym every day and I eat pretty good.

Josh: One thing about being an entrepreneur that nobody tells you, is you don't have to work a 40 hour week, but you have to put in the work. And you can choose to do it on Saturdays, which is great because you could be a completely flexible schedule and be, "You know what? I'm going to take Tuesdays off, I'll work on Saturdays." That can work for you but you do have to still put in the work as long as-

Brandon: For sure.

Josh: But you get that flexibility to be, "You know what? I am going to sleep eight hours a day. I'm going to make sure I take this time it just might be different time than other people take for themselves."

Brandon: For sure.

Entrepreneurship is about perseverance. The people who do well in starting anything are the ones that just continue to keep at it. It might take five years, it might take 10 years

Josh: Anything else that you'd like people to know?

Brandon: I would just say, don't give up. Entrepreneurship is about perseverance. The people who do well in starting anything are the ones that just continue to keep at it. It might take five years, it might take 10 years but anybody who quits is a fail... You're planning for your own failure, so I'd say just keep going. I've weathered a lot of storms, I've had companies run out of money several times and we just kept going and we always had a win from not giving up.

Josh: Perseverance is definitely a strength. So the website is useblacksteel.com, for anybody that's interested in the product, wants to sign up, who hears this and we'll link to that when we set up the mail and in the show notes, and we'll have some images of the signup flow that you guys have so that people can see how you're getting. What the workflow is that you're sending people through.

Josh: The last thing is if somebody wants to get in touch with you and ask you a question, how can somebody get in touch with you? What's the best way?

Brandon: There's a couple of ways, you can go to the @useblacksteel Instagram. You can always email me at Brandon@useblacksteel.com and I'll get back to you pretty quickly.

Josh: Cool, that's great to hear. Thanks for your time today. So I'm going to turn off the recording now and I look forward to coming back and chatting with you after you've gotten past $100,000 and your next round.

Brandon: Awesome, thanks.