Ep. 162 – Credit Karma Co-Founder & CTO, Ryan Graciano

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Our guest today is Ryan Graciano, co-Founder and CTO of Credit Karma.

As a co-founder and CTO, Ryan Graciano has grown the company’s engineering department from a one-man band into a team of hundreds, developing a technical framework to support the company’s rapid growth. His expertise and innovation has helped bring new levels of usability and sophistication to financial services technologies.

Today, Ryan runs an ever-expanding group of engineers tasked with building out new products at pace while stressing a culture of agility and experimentation, even as Credit Karma reaches new levels of scale. As a leader, he serves as a constructive agitator, looking to break down traditional workplace hierarchies and empowering each member of his department with real influence over the future of the product.

Ryan has a Bachelor’s degree in Computer Science from the Georgia Institute of Technology and spent five years at IBM before joining Credit Karma.

 

In This Conversation We Discuss:

• How Credit Karma was formed in the lending space
• Believing in your investment during the beginning stages of your company’s growth 
• Mistakes made and lessons learned on the journey to company acquisition 
• How to filter through different initiatives  
• Experiences of hiring during rapid growth 
• What skills Ryan worked on as the company grew around him

Resources:

Connect with Ryan Graciano: LinkedIn 

Credit Karma – https://www.creditkarma.com

Inuit’s acquisition of Credit Karma – Read Article Here

Connect with Cameron: Website | LinkedIn

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Our guest is Ryan Graciano, the Cofounder and CTO of Credit Karma. As a Cofounder and CTO, Ryan Graciano has grown the company’s engineering department from a one-man band into a team of hundreds, developing a technical framework to support the company’s rapid growth. His expertise and innovation has helped bring in new levels of usability and sophistication to financial services technologies.

Today, Ryan runs an ever-expanding group of engineers, tasked with building out new products at pace, while stressing a culture of agility and experimentation, even as Credit Karma reaches new levels of scale. As a leader, he serves as a constructive agitator looking to break down traditional workplace hierarchies and empowering each member of his department with real influence over the future of the product. Ryan has a Bachelor’s Degree in Computer Science from the Georgia Institute of Technology, and spent five years at IBM before joining Credit Karma. Ryan, welcome to the show.

Thanks for having me here. I love the concept behind this whole podcast, so I’m excited to speak to you.

Looking forward to this. Curious, what it was like for you to leave Big Blue and go into, I’m guessing, Credit Karma was pretty much a startup at that point?

Startup is actually a strong word, more like an idea. Although our founder, Ken had raised some money and the CEO. My parents told me not to do it. They thought it was a bad idea. Then, my mentor at the time was like, “Yeah, I could see it. Who is ever going to give you their assets? It just seems like it’s going to be dead in the water.”

My parent’s point of view is emblematic of a different generation. You have such a stable thing, why would you ever want to leave? IBM’s a job for life. But at that stage of life, I was looking for the opposite of a job for life. I was looking for something that was more exciting and interesting and something where I could make an impact. The risk for me was, “Maybe it doesn’t work out, but I’ll figure something out.”

Were you financially set already after being at IBM for five years? Or did you just have a small little nest egg put together? How did you grapple with that? You didn’t have kids yet at that point so.

If by nest egg you mean I accumulated a lot of debt, yes, I had a wonderful nest egg. I was just out of school. I wasn’t making very much money. I had some loans and my then girlfriend, now wife, was making $12,000 a year as a grad student. We were both completely dependent on my income. There was definitely some risk there, but I was pretty confident that if it didn’t work out, I would figure something out and we lived so lean back then. We had a $300 a month apartment. It was just a very different lifestyle. We lived in Tennessee in Knoxville, in a college town, so it’s easy to live very cheaply.

Is that where you were based when you started Credit Karma as well then? Or did you start in the Bay Area?

I was based in Tennessee in Knoxville because my wife was getting her Doctorate in Nuclear Engineering at UT Knoxville, outside of Oak Ridge. That’s the place to go. Ken, our CEO, she was here in Oakland, California. Nicole, who was at that time a Chief Revenue Officer, she was in LA and planning to move. We were actually distributed to start with the company.

How did you meet them? Were they hiring or did you know them already?

It’s a funny connection. My wife’s roommate in grad school, she started dating this guy, Greg, who’s now Credit Karma’s Chief Marketing Officer. Greg and I became friends because we both moved to Tennessee to be with our respective girlfriends. We were the only other person that we knew there. We spent a lot of time together. He introduced me to his friend, Ken, who had at the time started a search engine marketing company called Multi LITEX.

In Multi LITEX, they were seeing what was going for top dollar on Google. They could see that free credit on Google was just worth tons. They asked themselves, “Why is this?” They started digging into the model. Ken had a lot of background in the industry. Then that led to an idea. Greg, when he knew that I was looking for something else said, “You should meet my friend, Ken. He has got a great idea.”

That was the start. Tell us what Credit Karma is then.

Credit Karma, the initial concept was that we would be able to connect you efficiently with financial products, if we knew your credit. The lending space is really opaque. If you go to find a mortgage, you don’t get to pick from a list of mortgages that are all pre-approved for you. It’s this horrible process where you have to gather all this documentation and so on.

Credit Karma: The lending space is really opaque. If you go to find a mortgage, you don’t get to pick from a list of pre-approved mortgages. It’s this horrible process where you have to gather all this documentation and so on.

Our idea was we’ll give out free credit scores and free credit reports. Then long-term, we’ll figure out how to use that information to create transparency and lending. The very first version just basically was free credit score and not much else. Today, we can pre-approve you for all sorts of products. We’re pretty much the best place to come and find money and the best place to get financial advice.

Is the free credit score and the credit report, would that be then your lead magnet? From that, you build your list, or you’re building your remarketing, and then you’re moving people into the financial products? Is that the model?

Yes, that’s basically the idea. The free credit score and free credit report and monitoring and all of those services are what bring people to the platform. But what’s interesting is that when you come, you’re coming for a reason. Like, you’re going to get your mortgage. Credit is a way to get the mortgage. It’s a means to an end. What we’ve figured out is how to make the end actually a lot better, a lot more efficient. When you’re here, you realize like, “All this stuff is pre-approved for me, and the rates are laid right out here for me.” Over time, people will come to realize that this is just a better way to get financial products.

Is it true that you guys are now, how many employees was it, 800?

Nowadays, we have somewhere around 1,300-1,400.

1,300 or 1,400 employees, in how many years?

We started in 2007, so I’m on year 14 now.

Year 14, and you’re at about 1,300 or 1,400 employees. The company has changed.

It’s grown a little.

Every day, this is the biggest thing you’ve ever done?

Yes, that’s true.

How would you describe some of the hurdles? Are there a few defined points? I used to call them the 1s and the 3s, that when you have 1 employee to 3, to 10, to 30, to 100, to 300, to 1,000, it feels like some hurdles. Do you have any hurdles? Can you walk us through what changed in the company and how you got through that?

Yes, I like that model. I think that that model actually holds up pretty well. The 1s, the 3s, and the 10s. I definitely noticed that around that 30-ish mark. I think 25 is when I started to notice that you’re starting to manage a group. You don’t know every single thing that every person is doing. High-level, you do know everything that everyone’s doing and you know all the people really well. I thought the most challenging phase of growth was right around the 300 mark.

Now, you don’t know everybody. It’s not possible to know everybody. You really need these structures of people that are working well and these systems of evaluating, whether the structures are working well. I thought that was the most interesting phase. When you were in the hyper growth phase, when we’re going from ramping from 300 to 1,000 very quickly, I thought that that was when we experienced a lot of the growing pains that you hear of rapid growth companies are having.

How have you had your funding? Were you bootstrapped? Did you bring in funding?

We had some seed funding from connection that our CEO had. That was interesting. We started in 2007 and then our Series A was in 2010. We’re in lending space, right? 2007 is the height of the peak. 2008, banks are literally collapsing.

Nice time to start.

Great time to go tell VCs that your model depends on consumer lending. We pitched like 40-something VCs in 2008-2009 timeframe, trying to get a Series-A done. It was so challenging. We just weren’t able to get the terms that we wanted. We had crazy terms come back at us. We didn’t think it was worth giving up that much of the company, and we weren’t really willing to bend. Instead, we raised a bridge around. We did friends and family and me with my stag of like negative $30,000. We put in $10,000 actually just to try to keep things going and be a part of what was happening. That was a good investment, by the way, that panel. Best investment I ever made. We had a lot of doors closed on us and we had to be lean, save money.

What’s that like when you’re doing that and you believe in it, and you know it’s hard and the doors are closing? What does it feel like and how do you get through that? How do you get up every day?

It can be very demoralizing to have many people not believe in what you’re doing and to not get that external validation and the excitement. We weren’t on the front page of TechCrunch in 2008, but what we did have was great consumer traction. People loved our site right off the bat, and the member feedback was amazing. At that time, because we were lean, I literally ran customer support and actually responded to tickets myself out of an inbox I created. Just reading them was energizing because people liked us so much. It felt like we have something great. We have to weather this storm right now.

It can be very demoralizing to have so many people not believe in what you’re doing and not get that external validation in the excitement.

It’s interesting. I think listening to your customer is the only external validation we really should be listening to as well. If we’re listening to ourselves, sometimes it can be a little bit of that entrepreneurial seizure happening or that narcissism that’s kicked in but when you’re truly listening to your customer. Did you share those emails with the team?

We did, yes. We would pass them around to keep people excited. I think what’s interesting is it did set a culture of not really believing in the hype, just listening to what the people say, not worrying too much about what’s on the front page of the blog, but thinking more about who’s using what.

Have any of those 40 VCs come back around now in additional rounds?

Since then, we raised quite a bit of money and things went very well and things changed. Also, at that time, financial technology, fintech wasn’t really a thing like it is today.

Fintech is huge right now.

Huge and it’s one of the spaces where I think there are tons of opportunity for disruption.

How much have you raised, all told now?

I think on Roots, we had raised somewhere in the 800-ish million raised, including everything on the way. Jamie and our PR team could fact check me on that.

Isn’t that mind-boggling when you think about that for a second? When you just stop and go like, “14 years ago, we were living in a 3-bedroom apartment, and now we’ve raised $800 million based on the 4 of us who were trying to figure it all out.”

Yes, it is remarkable to look back on it and it happens so quickly. When we were in the 2011-2012 time range, right before, we had figured out how to scale the business to get the unit, get the economics working properly. We were talking about what would it take to get to our first 5 million consumers. I think it was a year or two after, where we had a year where we had hit 13 million acquisitions in a year. Right after, we were hitting 17 million, 18 million a year. Now of course, we have 110 million unique consumers in the US. That’s a very clean userbase because they’re all identified by their Social Security Number. We know that they’re individuals. It’s been remarkable to see the growth over the years.

Where are you based out of?

Our main office is now in Oakland, California, so not too far away from me.

Somebody asked why you were based in Charlotte. Somebody have you confused with another company?

No, we actually have an office in Charlotte. We have a great location there that we’re growing very rapidly and we’ve loved the people that we’ve worked with there. I actually started my career with IBM. I started at a small company in Charlotte. It was acquired by IBM. I went back later and I joined up with some of those folks and we started an office there.

That makes sense. I had a couple questions that people wanted me to ask you. Somebody said, “In the data science field, it’s difficult to develop trust with data providers. What are the KPIs that the bureaus use to grade Credit Karma in continuing to be a data share partner as a service provider?” That’s interesting.

I’m not really sure what you’re trying to get at with that question. We don’t share data with the credit bureaus in the way, we’re not a lender. We’re not a company that reports on whether you’re paying or not. Our interaction is the reverse. We take bureau from the data and give it to the customer and we take data from the lender and give it to the customer. We don’t share data in the other direction.

That has been the flip in the industry. Where are you guys taking the company now then? Are you going public? Have you built and raised enough money now that you can just continue to scale this thing?

We were acquired by Intuit actually. We closed for a little over $8 billion, all considerations included. Now, I’m a member of the Intuit team.

How did that feel? What was that like when that happened?

It was exciting. I think that there are a lot of things that worked well there. I think that our combined mission and capabilities really made a ton of sense. For us, we want to make finance better for people. We want to make it easier, we want to make it more transparent. I want to automate the routine, boring things in your financial life.

Credit Karma: Our combined mission and capabilities made a ton of sense. We want to make finance better for people. We want to make it easier and more transparent.

It really shouldn’t need to do a lot of things that you have to do manually today. Intuit has a lot of reach because of the tax platform that they’ve built, the payroll platform that they have. They just have capabilities that we had. We had been trying to replicate on our own. We had built our own tax product for example. We were trying to figure out other ways of getting income data and expanding. If you’re trying to pre-approve someone for a mortgage, you need the income. You can’t just have credit. You need the full picture. They just had so much that we could work with. I was excited to see that.

Did you make any big mistakes along the way?

On the journey to acquisition?

Yes.

We made a lot of mistakes. I don’t even know where to begin. We made so many mistakes. We had many different product ideas that didn’t pan out in 2007-2008. I spent a ton of time working on social. We were trying to be more of a social platform, which was also a route to funding back then. Because if you want to get funded in 2007, you have to have the word social in your pitch deck. We had all these social features. One of the biggest mistakes, I think, I made was prematurely scaling some of that stuff. They’re just a waste of time. We spent time preparing for some of these social features to maybe hit virality and they never did and completely different things took off.

How do you learn from that? How do you put in place that it’s hard to say no as often as I think companies need to without killing spirit of some of the employees and the ideas? How do you decide what ideas to say yes to, or which initiatives to say yes or no to, or how to yellow light or red light them?

It’s actually hard to predict what’s going to hit and what isn’t. If you think of yourself too much of an oracle or use your past success too much to justify your own prediction, I always call people and question a little bit. I run engineering of course, but also I have our core product team which builds the app that you use every day, and our recommendations team which decides what you see in the application, and the design team.

People come to me for product oracle type things all the time. My first thing that I always say is, “We may have been very successful at this and some of that was instinct and some of those luck.” A lot of it is actually doing things and being attuned to how people are reacting to them and then adjusting and not assuming that I got it right off the bat, because it’s hard to get it right off the bat. How many people do that?

Do you just let the teams try stuff then and see if it sticks?

Yes, I do. I try to want to what’s the opportunity, what would lead us to believe that people would like this thing? If there’s really no way to get a read, then okay. But usually there is something, especially if it’s adjacent to our space. Usually, we’re trying to do things to gauge interest. Like, is there a painted door or a blog post, an email, something where we can just see or people just interested in this topic or this concept. If we get some heat, it’s a lot easier to go and build conviction and start down a path. Some of the biggest ideas can be tough though to test. You do. You just try them and see what happens.

If you had to raise or grown the company without raising or maybe raising 1/10 of what you might have in your first couple rounds, what would you have done differently? I don’t mean by that that money made it easier because it doesn’t. I’m just curious, if you would have done things slightly differently?

I think money makes it way easier. In our Series A, we raised $2 million I think, because it wasn’t like today’s Series A. This was a 2010 Series A, and we didn’t raise again for a couple years after that. We had made it on.

You didn’t grow organically then for a long time?

Yes. From 2007 until 2012, we had raised very little money and by today’s standards it would be comical, how little we raised. What we did is we tried to add off the beaten path business models with like white labeled and sold services to banks. We would do affiliate networks, just anything that we knew would create a little extra revenue, even if it wasn’t in the heart of what we were doing. If I could figure out some way to also build some feature that used the same technology, even better. We did stuff like that actually just to bridge until.

Just like anything to generate revenue and gross margin, you do that and then you try to use that cash to buy your way out. Right?

Once we started, really raising 2012 and beyond, and the money really started flowing in. One of the tricky parts is you just start hiring like crazy and there’s just this open door and at that point recognize that at some point you’re going to step back and look and see what all came through. I don’t mean like individuals, but I mean more like what teams you funded and what kind of composition of the company ended up looking like. Then, you’ll discover some things, some inefficiencies, and some things that you probably wouldn’t have planned for, but it’s hard to control when you’re just sprinting.

Is that some of the growing pains that you mentioned earlier?

Yes, definitely. I think that’s definitely in the space of growing pains. When you have that open door, it creates a very different culture. When it’s just spend, go crazy, hire a ton of people. Spending is not the limit right now. It’s just how quickly can we capitalize. I think one of the biggest challenges for us was that attitude was very different from the culture of the company which was, “Be disciplined. Get it right. There isn’t a lot of money.”

There was a bit of like a culture clash at that time. I actually think we eventually resolved that. We went back to where we started and we said, “Look, we’re a discipline company. We’re not going to go crazy. We’re going to plan carefully. I do think that maybe we slowed that hiring a bit and some of the growth a tiny bit there, but long-term that paid off a ton. Because when something like COVID comes around, we’re prepared.

Don’t go crazy, but plan carefully so that you’re prepared when something like COVID comes around.

When that cash infusion comes in and you do start hiring rapidly, did you hire strategically? Did you sit down as a leadership team and say, “Okay, let’s build out these areas?” Or was it more the squeaky wheel gets the grease? Like, some managers came in and said, “We need more people,” and you gave them resources. Did you grow based on who yelp loudest or did you grow more strategically?

We were a little more strategic. I would say, that we had at the time our size… I was very connected through the engineering team to where we were hurting the most. We knew where we wanted to grow. What features and where was the business going to expand? We targeted those areas first. The challenges is we just couldn’t hire fast enough to fill everything. That’s where it really got hard. It’s like, “Okay, now that we’ve approved all of this.” But in reality, what will actually get fed? I think that was maybe the more interesting discussion, when the reality starts to hit.

What did get fed then? What was your focus? Was it product and engineering or was it more on the sales and marketing again?

We went product and engineering heavily. We went after that because we believed that, ultimately, we’re consumer products and making better products is what we do, even if we can’t monetize them as well. It’s okay because as long as we have people enjoying the product and getting value out of it, we’re going to be fine. That’s always been the mantra of the company.

I invested pretty heavily in platform because at that time I was recognizing that, if we are not dramatically overhauling the platform in this hyper growth phase, it doesn’t matter how many engineers we have. No one’s going to be able to do anything. I was up nights thinking about, “What is this company going to look like with 800 engineers on this technology platform? How is that going to function?” Get lots of late nights in my office with heads of engineering, debating different paths and tactics, and strategizing the talent that we needed. We tried a bunch of things that didn’t work. That’s a whole ball wax into itself.

At what point in your career there were you starting to hire a lot of people that were definitely smarter than you are? You know that stage where it’s like, “I don’t even know what this guy does, and he reports to me or two levels below me, and I don’t even know how he does his.” Where was that? Was that 100 people? 300 people?

Yes. That 100-300 range is what I was going to say. Especially at 300 is when you start to get real domain experts where, “I’m dangerous on insecurity because I dabbled as a teenager and I’m dangerous in databases because I had to do a lot of our database work.” All those things where you’re like, “I know a little bit,” but then you get a real DBA and you’re like, “I know nothing.”

I remember we were hiring our head of IT at 1-800-GOT-JUNK, and Brian and I looked at each other, we were like, “We don’t even know what to ask him.” We have no idea what to ask this guy. We had to bring in outside advisors. We brought in the Head of IT from BusinessObjects just to do our technical interview. We could interview for culture, but we didn’t know how to do their job. Then the Head of Finance, I’m like, “I don’t know, I got a bank account. I don’t know what a CFO does.”

I really made that my goal too. To have that same feeling of, “I really don’t know what’s going on at that depth.” What I was really focusing on is which domains do I target first? Because you have to pick and choose. You can’t hire everyone all at once, possible bandwidth-wise. The advice I got was to focus on the things that I just didn’t enjoy. Don’t focus as much on what I’m good at or not good at, but what do you not get up in the morning to do?

Credit Karma: Don’t focus as much on what you’re good or not good at, but what do you not get up in the morning to do? Get some experts there first because they’ll do a much better job than you, and you can pour that energy into the rest of the business.

Let’s get that off my plate first.

Get some experts there first because one, they’ll do a much better job than you for your lack of interest. Then two, you’ll pour that energy into the rest of the business, which was great.

What did you start doing at that point? Did your role move into strategy? Did it move into developing people, aligning people? What did your role move into when you got that full team underneath you?

In that hyper around 300 people, I probably spent 60% of my time, if not more, on just hiring and team building. Then tons of time on organization and just making sure that we’re making the right decisions and how we organized and leaders that you have in place at 100 people that they don’t always work at 300 people, and 300 people doesn’t always work at 1,000 people. You’re constantly trying to figure out how things are going and how things are working.

I was spending a bunch of time just on organizational health and culture. That was probably a good chunk of my waking hours. But then the tech was also very much at the forefront. I wanted to get a strong three-year, where are we going, and how are we going to do it type of roadmap, which was also how I was evaluating some of the, I don’t want to say competency, but fit of the leaders that we had at the time. Are they leading me there or am I leading them there?

You do get to that point where sometimes, especially through the hyper growth, where people can’t stay in the title they used to have, or they can’t stay as the head of an area because they don’t have that domain expertise to take us to the next level. What are those discussions that you’re having with people to tell them that? How do you keep them but also bring in someone above them?

It’s a mixed bag. In some cases, I think people just said, “Hey, this isn’t for me.” I enjoy this 50-person company and 100 was a stretch and now 200, I think I’m done. That’s okay. That totally makes sense. Some folks just went and did smaller companies. Others, we tried to say like, “Look, you love running this size and we have a spot here, where this makes sense.” That’s harder on the domain stuff.

It almost never works on the domain stuff because in the deep domains, the DBAs, you’re going to get someone who only does that and you have basically none of your initial people are going to be like that. They’re going to be generalists. What we intended to do is we would have like a generalist team developing features and we would say, “Over here, there’s a job that’s like the job that you’ve had at a similar scale. It’s just, this domain is a little bit different, but it’s similar. It’s generalist. You’re building out a new vertical or a mortgage product or what have you.” That worked well. There are a few rare people that actually just scale. I think it is more the exception of the rule, but I saw it happen. There are one or two people.

How do you scale? How did you grow your skills, and what skills did you work on for yourself as the company grew around you or as you grew it?

I started this process where every year I would ask myself, one, “Am I the best person for this job?” Then two, “In a year, am I going to be able to do this job?” I tried to be honest and I would write out, especially in that 2012-ish range, when we’re in hyper growth. I’d actually write out like, “These are the things that if I were to replace myself. I’d really want this person to do.”

Then I would look at them and I would try to decide, let alone whether or not I’m capable. Do I even want to do these things? There were some areas definitely where I had gaps and I think the biggest gap for me was actually doing stuff like this. I didn’t like speaking in front of groups or putting myself out there. It was in the 300-plus person-ish range, where you had to start doing all hands. I’m like a nervous wreck for those things. I hate doing it and I hate preparing and I hate talking and all that stuff. When I did that exercise, I said, “I can’t exist like this.” I have to get better at this or step aside.

You’re good at it.

Thank you. I appreciate that. That’s not because I was born with it, it was because when I had that realization, the first thing I did was I made an engineering all hands. I made myself do it and it was horrible.

I think your laughter is actually one of your strong suits as that leader in speaking because it connects the person right back to you right away, especially visually. Some of people reading can’t see, but it’s just fun watching you giggle and laugh. It is a very endearing, engaging quality that I think doing in all hands or shareholders meetings or team meetings. That’s probably one of your strengths. It’s good that you work through it.

I appreciate it. That was just with the practice and getting more comfortable. It really was just getting the reps in and going up there and doing it. I used to spend a lot of time preparing and thinking through what I was going to do and I was so afraid that I would say the wrong thing. When I would say the wrong thing, I would freeze. There’s that, and it makes you want to not do it again. The one thing that I think I did really well is that I would do it again and I would just suffer through that terrible experience as many times as it took. So, I learned. I grew into it. I was very fortunate that our executive team had the patience for me to do that.

I want to talk about the relationship of you with the other cofounders. I’m sure that it was probably a super easy 14 years, right?

Of course, yes. There are no bumps.

No hiccups, no bumps, no arguments. Pat Lencioni and his book, The Five Dysfunctions of a Team, talks about the fear of conflict and the absence of trust. How did you continue to work on that with them? Can you maybe give us even an example of when there was a tough time that something you had to work through?

I think early on when you’re figuring each other out, because we didn’t know one another before we started the company. That was hard because you’re just trying to figure out who is on the other end of this phone and we’re not even in-person. I was remote for the first few years. It was different. There was no Zoom, really. There is Skype but we didn’t use it. We used Google Hangouts, text, chat for most things. If we had to discuss something, the CEO would just give me a quick call, and we would talk through it.

I never understood why people didn’t use Skype. I wrote about it in my first book many years ago. I said, “People should be using it with all their customers and suppliers as a strategic point of difference.” Because I said, “You’ll build the relationship up,” and nobody did. I was using it just to coach people all over the world but it sucked. I hated the platform.

It’s funny and I don’t even really have a good answer other than, we just went to the low friction thing, which was quick phone call or hangouts because we’re already in the habit of doing it. We never did. We never really did any video. At first, everyone is trying to figure each other out. It’s not even that I would say that there’s mistrust, there’s just not anything. You’re just learning.

Everyone’s trying to figure each other out, so it’s not that there’s mistrust; you’re just learning.

What I think we helped the most is when we went through our first adversities and seeing each other handle those things. We had a moment where we had just gone into beta and we’d started in July 2007 basically is when I joined. I had built our first beta by January of 2008. Our whole model is give away free credit scores. At the time, the bureaus were selling credit scores for like $20 a month.

Drove me crazy.

They control the actual scores. The challenge for us was how do you get them and give them away. We had this whole goofy plan where we were going to sell this concept to the business guys. There’s a group of people at the bureau that makes money when they sell credit scores to businesses. Then there’s the other group that’s a consumer group that sells to customers. We were like, “We’ll sell to these folks and we’ll hope that the other group doesn’t find out until we’re big enough that we’re a line item that they don’t want to shut down.”

It was crazy. It’s one of those get your foot in the door and like hope it works out later type of plans. In March, we had a lot of traction and we went big on slick deals. We had 15,000 signups in a day or two or something like that. I think it was later that week, we were served a termination notice from the bureau that said, “We’re shutting you down at the end of the month.” It’s one of the most stressful times in my whole career because we thought that everything we had built was just going to go away.

Going through something like that and seeing how your co-founders manage it and their dedication to the business, it creates a trust that’s hard to replicate. It’s the hard times. It’s not the successes, anyone can high five. It’s when things really go wrong and having each other’s back, especially through that 2007-2010 period, when things were so hard and you just had to believe and wade through a lot of muck. That’s where the trust was built.

Did you have to do a layoff when the financial crisis hit? Or were you still pretty small going through that?

We were small enough that we weren’t. We didn’t have to do that. We’re actually just planning to hire and raise. It killed those plans.

That was a weird time. I was running a company back in 2000 when this dot-com blew up, and our stock went from $24 down to $3 in a period of 6 months. It was a painful time, laying off 150 people at a time, and it was not a lot of fun. If we’re to go back to the 21, 22-year-old self, you’re just getting ready to start up with IBM. It blows my mind that you were there, and then doing this is so completely different. What advice would you give yourself back when you were just starting off in your career that you know to be true today, but you wish you had known then?

My 21, 22-year-old self thought that I didn’t want a job that had too much to do with people. I thought I was going to spend all day writing code and I enjoyed the solitary nature of my activity. I thought that I just wanted to choose my own destiny and do my own thing and be free of external pressures. Both of those things were completely wrong.

The COVID experience actually taught me, I get a ton of energy from talking to people and being around people. Actually, that’s what I enjoy about my job the most now. I tell this story sometimes when I was at IBM and on my final days there. I was on this team, and the manager pitched me on a project or basically a job where I could just do whatever I wanted. He was like, “I’ll give you no goals and there will be no metrics, and your performance reviews will be great no matter what. Just join the team.” It was true. I joined and I could pick my own projects, and I just really hated it. I didn’t like it at all. It’s hard to work when no one cares really.

If I could go back and tell my 21-year-old self something, I would say, “You don’t know anything. You’re going to learn a lot. You don’t know yourself. You don’t know what you’re going to enjoy in business. You just need to just experience a lot of things, even if it’s painful at first. Keep at it because you don’t know if you will start to like it, when you start to get better at it.”

Even if it’s painful at first, keep at it because you don’t know if you will start to like it when you get better at it.

I’m glad you guys kept at it with Credit Karma because you guys have absolutely crushed it. Great brand, wonderful company, strong culture, and a good exit last year for you as well. Ryan Graciano, the CTO and Cofounder for Credit Karma. Thank you so much for sharing with us. I really appreciate the time.

Thank you, Cameron. It’s been a pleasure. I really enjoyed it.

That was great.

Important Links

• Credit Karma
• Intuit
• The Five Dysfunctions of a Team

About Ryan Graciano

I am co-founder and CTO at Credit Karma, a company dedicated to re-engineering one of the largest industries in the world – consumer finance. Credit Karma’s mission is to help consumers have a better future by simplifying decision-making and management of personal credit and finances.

Credit Karma has scaled to become a major disruptor of the consumer finance industry, today valued in the billions with above 100 million members.