Joe Grover: [00:01] Welcome to The Real F Word. 

Joe Grover: [00:07] I remember when I first launched the podcast, it was interesting because everyone would reach out and say, “Hey, you really need to talk to this person,” or, “You really need to talk to that person.” And a couple of people, I think on LinkedIn, said, “Hey, you should really talk to Jake. Jake has this experience, and it’s fresh right?” It’s only been—

Jake Bengtzen: [00:23] It’s very fresh. August 19. Probably two and a half, almost three months.

Joe Grover: [00:29] Three months. And so this is an experience that you’re just coming out of: starting a company, raising a little bit of capital, building something that was meaningful and making a difference in the world. And you had to shut it down. And so today we’re going to unpack that a little bit. But let’s go back even earlier. You spent a ton of time in FinTech, right? You worked for Finicity and Mastercard. You were chief of staff; you had a leadership role there. Tell me about what led you to your first entrepreneurial endeavor.

Jake Bengtzen: [01:00] Yeah. So I grew up in a house where my dad was an entrepreneur. My grandparents were entrepreneurs. It was something that I was privy to pretty early, both the good that can come from it, but also the struggles that exist. Both my grandfathers had pretty rough stories when it came to entrepreneurship—failed ventures, things that went wrong, some things that worked. And so it was something that I just grew up familiar with. And when I was a sophomore in college, I ended up going to lunch with the founder of Finicity for the purpose of trying to get his advice on whether or not I should study finance or accounting. And two months later was my first day on the job at Finicity. So my foray into a startup and into this world for myself was very much serendipitous, and the Finicity journey was really exciting.

[01:57] Like you mentioned, I held various roles within the company. We got acquired by Mastercard, but towards the end, I was chief of staff. And that’s really when I started to think, “It’s great to see a company start, grow, succeed, but I want to be in that seat. I want to be in that chair. I want to go through that experience, not for the sake of just being a founder, but because I want to solve problems at that level.” And there were some problems that were really near and dear to me, and those were the ones that I actually ended up going and trying to solve and—

Joe Grover: [02:40] What else was it? It was the problem-solving, being in the seat, making the decisions, leading the vision and the strategy. What was the allure of doing it on your own versus—because Finicity was pretty large. Mastercard is massive.

Jake Bengtzen: [02:54] Yeah, Mastercard is huge.

Joe Grover: [02:56] You’re working for a massive organization, and now you’re like, “Hey, I’m going to start something from the ground up.” 

Jake Bengtzen: [03:01] I love building. I love creating. One of the most fulfilling things for me at Finicity was the ability to talk with somebody, to hear them express their problems, and to think creatively about, “There’s nothing that perfectly solves that. How can we solve that?” I think one of the most fulfilling things for me is being in a situation where something that I do or bring changes someone in a positive way, and entrepreneurship is all about that. It’s all about “How do I go and find problems that no one’s solved in a good way and solve them?” That was the allure to me. It’s not driven by the end result: It’s driven by, “I get to wake up in the morning, and I get to do something that hasn’t been done.”

[03:51] And there are a lot of entrepreneurial ideas to me that aren’t exciting at all. And it’s because they don’t encapsulate that true, meaningful, making a difference—I think about the quote “Where much is given, much is required” all the time. I look at the cards I’ve been dealt: born in Utah, lived in Canada for a while growing up, moved back. And then I’ve spent time in other places around the world where you see poverty and people who have a lot less. And going through those makes you realize I’ve got both a responsibility but an amazing opportunity to do something really, really meaningful. And to me, that manifests the best. In my opinion—it doesn’t have to be everybody’s opinion; this is a truth to Jake—as I’ve explored who I am and what I like, entrepreneurship is the way that that resonates for me.

Joe Grover: [04:51] So, not to jump to the punchline here, but does your experience with Zipper—which we’re going to talk about—does it change your perspective on entrepreneurship? Does it weaken your resolve? Has it made you question whether or not you want to do this again?

Jake Bengtzen: [05:09] Immediately thereafter? Yes. Two and a half to three months later? Absolutely not.

Joe Grover: [05:15] It only took you three months, and you’re like, “I’m going to get back on the saddle.” That’s amazing.

Jake Bengtzen: [05:18] In my head. Actually doing it? No. There’s, “I’m going to do it differently,” I think, is the punchline to that. Definitely. I love the journey. I love the experience. Failing did not make me question whether or not—it made me question whether or not being an entrepreneur is what I want to do. But it was more—it came more from “Who am I? What am I doing?” It didn’t come from a different place. It was more introspective questioning, “Is this what I want to do? Who am I? What am I good at?”

Joe Grover: [06:06] It was reflection, not discouragement.

Jake Bengtzen: [06:08] Yeah. It was all introspection. And I’m not over it yet. It’s not like I’ve moved on. I still wake up every day wishing that I would have figured it out. I don’t think that feeling is going to go away immediately.

Joe Grover: [06:20] Yeah, so tell me about Zipper. So did you start—this idea had been percolating for a while, and what’s the problem that you were solving? And how did you get this thing off the ground?

Jake Bengtzen: [06:33] Yeah, I think it’s helpful to start a little bit from the FinTech journey. I started at Finicity having no idea what the world of FinTech was. I’m a sophomore in college. I sit down on the first day, and it’s, “Here’s a list of a whole bunch of companies you’ve never heard of. You got to call them. You got to start trying to close them as deals. You got to bring them on as customers.” And I remember sitting there thinking, “This might’ve been a bad idea,” because I’m a total fish out of water. And as I started getting into it, I fell in love with this concept of—and for those who don’t know what Finicity is, there’s a competitor that we had that a lot of people know called Plaid. We did the same thing. We were the infrastructure that allowed people to connect their bank accounts to apps. So if you used Venmo or Robinhood, you’ve interacted with the technology that we were building. And there was something amazing about how unlocking access to people’s bank accounts where they could share the information that lived there in other places. you could get lower interest rate loans, you could send money to friends, you could get and bypass a lot of the fees that existed in financial services. That, to me, was really meaningful, because I saw it doesn’t make sense. It’s hard enough for money to be made in certain situations. But why does the place that you put it take from it, right? That was something that I really fell in love with. I really enjoyed being a part of. 

[08:11] Well, I started my family. We had kids. And going from being a couple where you don’t go and visit the doctor a lot to having kids and complications with having a baby, I started to experience a part of financial services that was very foreign to me, which was the cost of healthcare and seeing how insurance worked and how— 

Joe Grover: [08:34] So affordable, right?

Jake Bengtzen: [08:35] —the bills worked. Yeah.

Joe Grover: [08:36] Premiums of 1,700 dollars a month.

Jake Bengtzen: [08:39] I’ve got a friend who said the greatest trick the devil ever pulled was convincing people that out-of-pocket costs don’t include the insurance premiums. In 2023, the average cost for a family of four just to have insurance—which is the premiums you pay monthly—24,000 dollars. A lot of that is oblivious to us because our employers pay it. It comes out of our paychecks directly. And so 24,000 dollars a year goes to paying for healthcare for a family of four. That does not include the money that you pay out of your own pocket before you’ve even met your 6 or 7,000-dollar deductible or your— 

Joe Grover: [09:22] This is so broken. 

Jake Bengtzen: [09:23] 15,000 dollars in out-of-pocket costs. 

Joe Grover: [09:26] And we all feel it, but no one can solve for it. And the costs just go up. I’ve never seen the—I’ve never gone to a renewal, right? 

Jake Bengtzen: [09:33] Oh, it never goes down.

Joe Grover: [09:34] “Oh, hey, guess what? I’m going to save you 20 percent this year. It always goes up. 

Jake Bengtzen: [09:38] That is hard. There’s no relief in sight for increasing premiums, at least in the existing model. Well, to talk about Zipper, that was the problem I wanted to solve.

Joe Grover: [09:50] Huge problem—billions, trillion-dollar problem. I don’t know how big the healthcare industry is. 

Jake Bengtzen: [09:56] 4.5 trillion dollars.

Joe Grover: [09:58] 4.5 trillion.

Jake Bengtzen: [09:59] And about half of that is funded by the 160 million people who get health insurance through their employers. That’s a big, meaningful problem. I have directly felt the pain of that. I remember going to a doctor’s visit, and it was a visiting physician, and that visiting physician was not covered by my insurance. Yet the location that I went to was. And for those who don’t understand the dynamic in healthcare, when a bill gets put together for you, you’re billed by both the facility and the doc. 

Joe Grover: [10:36] The practitioner. 

Jake Bengtzen: [10:37] And sometimes—

Joe Grover: [10:38] One is in network and one is out. 

Jake Bengtzen: [10:40] And one isn’t. And in insurance, the cost for something in network versus something out of network is totally different. We got a 1,300-dollar bill. And I’m thinking to myself, “I pay a ton of money every month for a solution or a product that’s supposed to pay for my healthcare, right? But it didn’t.” So experiences like that over time led me to digging in and trying to understand. I get the FinTech world. I understand how it works. Healthcare is one of the biggest problems, and my thesis was money is the root cause of most issues in healthcare. And I validated that, but not in the way that I thought I would. So that was the impetus behind Zipper. It was personal experiences. Plus, as I went out and talked to people, it was ironic how the financial pain oftentimes mimicked the emotional and physical pain in healthcare. That was absurd to me. Still is.

Joe Grover: [11:46] So what problem was Zipper solving?

Jake Bengtzen: [11:48] We were trying to lower the cost of healthcare for individuals.

Joe Grover: [11:51] And how were you doing that?

Jake Bengtzen: [11:52] There are companies who advertise insurance as being simple. It is—no. 

Joe Grover: [11:59] It’s never simple. 

Jake Bengtzen: [12:00] No, it thrives off of complexity. 

Joe Grover: [12:05] Do you think that’s purposeful? Do you think it could be simple, or do you think it’s just inherently complicated because of the way that our healthcare system works?

Jake Bengtzen: [12:14] I don’t think anybody—I don’t think most people who work in the world of insurance or healthcare—I think the majority of people are amazing. They do things for the right reasons. I think, over time, insurance came about in 1943 as a solution to wage control. I think the 81 years of bolting on additional solutions and morphing it, I think that’s the problem.

Joe Grover: [12:40] It’s just amalgamation of HMOs and PPOs and HDHPs and HSAs, and FSAs.

Jake Bengtzen: [12:52] It’s a system with a lot of baggage that’s tried to solve immediate, short-term problems. And as the target has moved, the baggage of solving the previous problem was brought along to solving the next. And so we live in a world where there’s this giant, archaic, difficult-to-change system that thrives off of incentives that negatively impact consumers. And so when I went in, it was, simply put, “I just want to lower the cost of healthcare for Joe, for Jake, for people who work really hard but end up paying 24,000 dollars just to say that they have insurance when they go to the doctor’s office, and they’re paying a copay instead of paying the price out of pocket.” That’s it. I want to lower the cost because I think that there’s a lot of money that is wasted. And that was it. That was the basis. I just want to solve that problem. And the insight was, coming from the world of Finicity, if people can share information directly from their bank account with an app, there’s a lot of interesting, unique business models and insights that that delivers that lowers the cost of financial services. When you go to the doctor—this is crazy to me—and you get a service, you have no idea how much that costs.

Joe Grover: [14:07] And if you ask—which I’ve done so many times. In fact, in my background—in fact, my dad worked at a large broker at the tail end of his career for 15 years. And so I grew up talking about consumer-directed healthcare. And so my familiarity with benefits comes from, really, even my childhood.

[14:28] And the reality is when you ask a doctor, right—and I’ve done it so many times—“How much is this going to cost?” They don’t know. They don’t know the answer. And once in a while, there’ll be a range, or they’ll give you to the office manager. But it is shocking. It’s like going into a car dealership and saying, “Hey, I like that car. I need that car.” And they’re like, “Perfect. Here you go. Here’s your car. And we’ll send you the invoice in 30 days.” And you’re like, “Is it 20K? Is it 30K? Is it 50K?” It’s insane.

Jake Bengtzen: [15:01] Again, it’s a byproduct of the system. It’s not that that doctor doesn’t want to tell you. 

Joe Grover: [15:08] No. He doesn’t even know. 

Jake Bengtzen: [15:10] But if I’m a doctor, and I say, “It’s going to cost you 200 dollars,” and the bill comes back later, and it’s 300 dollars, how do you view me now as your doctor? 

Joe Grover: [15:20] Yeah.

Jake Bengtzen: [15:21] Not great. It also depends on what insurance you have, what plan you have, how much of your deductible you’ve already paid out. There’s just so many factors that play into this that make it complicated. It’s just really difficult.

Joe Grover: [15:34] It’s a multitrillion-dollar problem. Was the problem too big for you to solve?

Jake Bengtzen: [15:38] Depends on how you frame the problem. It depends on that. VCs love big TAMs. But as a founder, part of the journey, at least from my perspective, was we need to raise money. And saying healthcare is a 4.5-trillion-dollar problem, it’s almost too big.

Joe Grover: [16:03] I want to talk about TAM for a second, though, because I think that’s a really great insight. For many, many years, right, it was always everyone would just show up, and it was just a huge TAM. I don’t really care about the total addressable market. I do care about the serviceable addressable market and what percentage of that can I obtain. And so you probably found yourself getting really deep into really understanding what’s the pocket, what’s the corner of the market that you can service with your solution or with your product, and how much of that can you actually obtain. Right? And I think that’s when an entrepreneur is pitching, and I’m on the investor side, and they really understand that deeply, that, to me, is a strong signal that they’ve done that work to pare back the problem to something that they can actually address as a startup with limited resources. And then that can be a land-and-expand approach where they solve this problem. Then you can solve other problems, and you can move to a larger obtainable market.

Jake Bengtzen: [17:05] Yeah, in the throes of trying to fundraise, I did not think enough from a first principles approach. Zipper, for me, was—I had a previous cofounding experience in an incubated startup. But truly, as a first-time founder, Zipper was it. I cared a lot about what other people thought, and I was confident in my abilities. But I was confident in the abilities of people who had succeeded before. And we had some really amazing advisors who had raised from top-name VCs in New York and Silicon Valley. And the advice I got pertaining to TAM was you want a big TAM because VCs really like a big TAM.

[17:55] Well, the truth is the VC cares about your revenue because your valuation and your success is on whether or not you get to 100 million dollars a year in revenue or more. That’s the VC measure. TAM is just a way to say the market’s big enough where we can get 100 million dollars in revenue. Well, there’s a lot of businesses who make a lot more than 100 million dollars in revenue who, when they’re pitching initially, their TAM is in 4.5 trillion dollars. And so it’s a proxy for “Is there enough room here for us to make enough money to have outsized returns for you as a VC?”

Joe Grover: [18:32] That’s why the obtainable market. That answers the question whether or not it can be 100 million dollars in revenue in the next five years, right?

Jake Bengtzen: [18:40] In 10 years, are there enough customers who want—well, in seven years, if you think of the math, seven or eight years—are there enough customers who will want what you’ve got, to the tune of 100 million dollars and paying for it? That’s what they really want, right?

Joe Grover: [18:55] And you went out and pitched this how many times? 

Jake Bengtzen: [18:59] Ninety-two. 

Joe Grover: [19:00] Okay, I love it. Ninety-two. How many times did you hear no?

Jake Bengtzen: [19:05] Eighty-five. And it’s helpful to get context: 92, If you include the seven angels who said yes and the 85 VCs who said no. There were more angels and others that we spoke with.

Joe Grover: [19:24] Because the angels are the ones that ended up funding the deal. No institutional VC. It was a little too early.

Jake Bengtzen: [19:30] We did have an institutional VC, but it was, “We believe in you, and we’ll give you an angel-sized check: 25K or 50K check.” It wasn’t, “Oh yeah, here’s 500 grand or a million dollars.”

Joe Grover: [19:44] Success or failure on the fundraising front. Because I’ve done this many, many times, and we always keep track, right? You have a sheet where you have all the investors, and you get no after no after no after no after no after no sometimes. I think the most was 200, I think, we pitched when I was raising money once to raise our series A. 

Jake Bengtzen: [20:06] Yeah, that sheet has 150 funds on it. It’s funny. My perspective on failing as I shut down the startup and been really introspective, looking back, I look at areas where we succeeded and areas where we failed. At the time, total failure. It’s really hard when everything about you and your business depends on someone else saying yes. And that’s how I saw it. And to fly to San Francisco and to go meet with a16z and Susa Ventures and General Cast and everybody else, and to walk in and be all excited and confident, and they respond back like, “This is a really good idea,” or, “We really like you as a founder,” and to either get ghosted or to get a quick no, or to get an email that looked like, “Wow, someone really was thoughtful in writing that out,” but they said no, and then six weeks later you see one of those investors funding a company—

Joe Grover: [21:12] That is in the same space—

Jake Bengtzen: [21:13] That’s very similar to the one that we were trying to start. That wore on me. And I thought a lot that raising money—we idolize that a lot, I think, as founders. 

Joe Grover: [21:29] We do. 

Jake Bengtzen: [21:30] It’s not a point on the journey to where you want to go. It’s almost like that’s the journey, that’s the accomplishment, and it’s not.

Joe Grover: [21:39] Yeah.

Jake Bengtzen: [21:40] It is not at all. But when you’re going through it for the first time, and when you feel like you need two to three million dollars to go and execute on this idea that you really believe in, when everybody tells you no, that’s hard. You start to question things. You said, “I’m a good founder,” but your actions say otherwise. 

Joe Grover: [22:02] For sure.

Jake Bengtzen: [22:04] Or I’m laying in bed at midnight, and I’m on my computer, and you’re just like, “I’m doing everything I can to try and make this work, and I’m dependent on other people saying yes.” Because it really matters what other people think, because if everybody hates it, then it doesn’t go anywhere.

Joe Grover: [22:26] What’s up, fail fans? As we’ve listened to so many guests on this podcast, that the road to success is often paved with failure, with a lot of challenges, and even full-on face-plants. But there’s a thing that you could do to help skip some of those bumps and bruises, and that’s really where the consultants at Amplēo come in. See, Amplēo offers fractional executives in finance, marketing, and HR. And these are people who’ve experienced a lot. They’ve been in the trenches. They’ve built businesses. They’ve failed. But here’s the kicker: They’ve learned from those failures, and now they’re applying all that wisdom to your business to support you so you don’t have to learn the hard way. I mean, think about it: Instead of stumbling around in the dark and hoping you don’t hit the wall, you could bring someone in who’s already mapped out that room, right? Amplēo consultants and experts have worked with and for numerous companies of all sizes, and they’ve gathered insights on what works and where to focus and how to actually grow your business efficiently.

[23:25] So while we embrace failure on this podcast, there is no rule that says you have to fail at everything yourself. So check out Amplēo and see how their fractional executives can help your business move forward and avoid those painful learning curves. Sometimes the smartest move is learning from someone else’s failure. Visit Amplēo.com to learn more.

Joe Grover: [23:48] I love your—I mean, entrepreneurs really talk a lot about this, right? Every time we raise money, we go to TechCrunch. We’re like, “We raised 5 million, 10 million.” And I understand, from a marketing perspective, as a marketer, why we do that, right? Because it’s a signal to the market that we’re building something of value. It’s been validated by top-tier VCs. It’s a signal when we’re trying to recruit great talent, right? So there’s a reason we do that. But the reality is we need to check ourselves, because the day that money hits the bank account, we often celebrate. And we do a closing dinner, and we’re like, “Yeah, we’ve arrived,” and you have not even started.

Jake Bengtzen: [24:22 You’re just taking on more responsibilities.

Joe Grover: [24:24] All you did is just took on this massive amount of stewardship for other people’s money, and guess what? The stakes just got really, really high. Did you feel that when you finally raised the money, were you like, “I’m off to the races, let’s go?” Or did you feel that responsibility set in? Because losing your own money is one thing. Losing other people’s money feels different.

Jake Bengtzen: [24:46] Yeah, and I lost my own money too. I put in, too, what, to me, what was meaningful. And an angel would put in that same amount of money, and to them, it didn’t really matter. It mattered a lot to me. I’ve been in situations where I’ve spent time with people in other countries who live off of very meager amounts of money every day. And so to come back and to think, “Oh, it’s someone else’s money, and they have enough, so if I lose it, that’s fine.” No, that money really means something. Effort was put into making that. And now they believe in me enough to give it to me. That’s a big deal. I paid myself three times in 18 months. 

Joe Grover: [25:33] Wow.

Jake Bengtzen: [25:34] And I feel even a little bit guilty for doing that. Yeah, no. Steward is the perfect word. I feel like, as a founder, you’re a steward of the money you raise. You’re a steward over the careers of the people you hire. You’re also a steward over making life better for the customers that you serve. You’re a steward in all the ways that you can frame that, in my opinion.

Joe Grover: [26:08] So when were the first signals? You raised some money. You built the product. What are some of the positives? You’re like, “Okay, we’re getting traction, some signals that things were working out.” And then what were the very first signs—the red flags—that made you question, “Uh-oh. We don’t have enough money,” or, “There’s a product market fit question,” or, “Acquisition costs are too high”?

Jake Bengtzen: [26:27] Yeah. For me, coming at this from an outsider, I remember we got connected with a health insurance company, and we went in and had this meeting. And it was—everybody was excited. Everybody was telling us, “The idea is so great. This is so cool. What you guys are doing is so innovative.” I felt like we had arrived that day, like, “Oh great, there’s a massive health insurance plan. They’re going to pay us a lot of money. We’re going to do a really good job.”

[27:01] As we started going down the path with this company, it was a lot of lip service. It was a lot of people telling us they liked us, they thought this would work, this was a great idea, it fits really well. But then they started saying things like, “We need to put together a business case before we take it to the actual decision-makers.” And I thought to myself, “Well, why can’t we just talk to them?” And they started saying, well, they just made up a lot of excuses. And so I took a step back. And I’m like, “Okay, well, we’ve tried to sell to health insurance brokers, we’ve tried to sell to employers directly, we’ve tried to sell to health insurance plans.” And the reason why we were trying all of these is because it’s really hard to sell something direct to consumer in healthcare. Because if you think back to the whole getting 160 million people access to healthcare through their employer, your employer decides what health plan you’re on. That’s just how it works, at least for the majority of people in the United States. And so for us, we thought, in order to make an actual difference, we’ve got to go and get in with those who make the decisions upstream. And that was insurance. That was the employer.

[28:14] Well, going to the comment of money is the root cause of most issues in healthcare, I thought it was the rising costs. What I didn’t fully comprehend was how the incentives work. So here’s the status quo in healthcare: You get health insurance from your employer. Your employer is not an insurance expert, so they hire or work with a broker or consultant. That broker or consultant is paid by the insurance plan that they represent. And the way that insurance makes more money is by raising costs every year. So if you follow that trend, it’s really difficult to get a lower-cost health plan because the employer says, “Well, now that drug’s not covered, and we’ve got employees who need that. I’m going to get yelled at because I just ruined this for somebody.” There’s this status quo, or there’s this existing belief.

Joe Grover: [29:19] I mean, we just rolled out benefits to a company, and I had people that said, “I can’t work here anymore because the benefits are more expensive.” And so then, as an employer, you have to ask “Okay, how do you deal with that?” Right? I mean, it is really challenging. And some people are happy, and some people aren’t, but everyone is going to be spending a good chunk of their income making sure they have this insurance policy. 

Jake Bengtzen: [29:42] Yeah, and the whole idea of risk pooling, it’s like, “We’re going to do one-size-fits-all.”

Joe Grover: [29:46] Yeah.

Jake Bengtzen: [29:46] But there’s a point where that breaks down. So the red flag started popping up when we’re talking to the insurance company, it’s not moving. We’re starting to look at the other areas where we feel like there’s a good opportunity for product market fit. And then you start connecting the dots between what this party wants and what this party wants and how the decisions were made. And it was like, “Oh, wait a second.” By trying to lower the cost at the employer level, the insurance company doesn’t want that. And at the broker level, there are some not great brokers, and there are some great ones, and there are some who are transitioning from a “We get paid commission from insurance” to a just flat-fee model. But what’s hard is they see a thousand solutions all the time and, “Okay, we’ll recommend this one if it’s proven.” Well, I’m a startup. I haven’t proven this out. I need someone to take a risk. So we’ll go to the employer. And you go to the employer, and the employer’s like, “Yeah, we buy benefits between July and October. And then we roll them out. And then we don’t make changes for the next year, because it’s cyclical. Health insurance contracts are annual.” 

[31:05] And so the red flags started to pop up when the health plan was just stalling out. We were really excited about it, but we started to get discouraged. And we’re looking at all these other avenues and realizing that there truly isn’t an inflection that causes these parties to want to lower the cost of healthcare in the way that we thought there would be. And that was hard. That was one of those—

Joe Grover: [31:33] Because it’s a channel play. You have to sell them through these channels. You can’t go direct to consumer. And that’s where the most pain is. 

Jake Bengtzen: [31:40] Yes.

Joe Grover: [31:41] Employers have pain too. Employers have to cover a good portion of those premiums. They have pain as well. 

Jake Bengtzen: [31:47] They totally have pain.

Joe Grover: [31:47] But they’re relying on their brokers to really recommend the solutions for their health plans and their benefits. 

Jake Bengtzen: [31:54] And there are very few people within the benefits function. And this is not anything against the function, and I understand why they think this way. I say all the time, “Firefighters don’t start fires.”

Joe Grover: [32:07] Yeah.

Jake Bengtzen: [32:08] A lot of people in benefits, they deal with fires all day, and the last thing they want to do is introduce a big raging fire, which is, “Our health plan is completely changing. We’re going to pay less money, but it’s not what you’re used to.”

Joe Grover: [32:23] There are some really interesting, more innovative models. There’s some health plans here in Utah that are smaller that are trying to solve parts of that big multitrillion-dollar problem. And I’ve been in these conversations where like, “Should we have a new health plan over here doing some really innovative things? Lower cost?” Or Cigna, or Aetna, or Blue Cross Blue Shield, or whoever. Name the health plan. And there’s a risk. And honestly, I don’t think brokers, I don’t think HR leaders, I don’t think people recommending benefits have an incentive to be innovative, right? They have an incentive to maintain the status quo, even if it’s not because of the financial incentives—it’s just more of a hassle. And so I can understand in this space how a new concept that can solve a problem, there’ll be some resistance. And even if they love the idea, the decision-making process takes so long. 

[33:22] So what’s the learning there for an entrepreneur? You’re in the early sales conversations for the solution, and people are giving you positive reinforcement, like, “Oh, this is great! You’re solving a problem! Great job!” But then it’s not moving along.

Jake Bengtzen: [33:35] Yeah, for me, I learned quickly that the sign of someone liking it is willing to buy it. Period.

Joe Grover: [33:43] Period. Sign a contract. 

Jake Bengtzen: [33:44] Pay me money. 

Joe Grover: [33:45] Yes. Stop listening to all the feedback positive from VCs that won’t write the check. And it feels good to get all the positive reinforcement and people on LinkedIn saying, “Wow, what a great problem to solve. I love this.” But, are they willing to open up their checkbook? Open up their wallet? 

Jake Bengtzen: [34:02] Put your money where your mouth is. 

Joe Grover: [34:03] Yes, exactly. 

Jake Bengtzen: [34:04] And there’s a lot of entrepreneurs and founders who talk about you sell—

Joe Grover: [34:12] Yes. Sell, design, build. Yep.

Jake Bengtzen: [34:14] I a hundred percent believe that—for me. I don’t think it’s—I think there are situations where you can do it differently. But if you want to look at a framework to start from and to build upon, it’s really magical when you have a good enough vision and people who buy in enough to say, “I’ll pay you ahead of time.” Now, they can pay ahead of time, and that money counts towards getting the product in the future when it’s ready, and you give it back to them if you don’t make it. It’s just the act of them willing to say, “Solving this problem is worth X amount of money to us, and we’ll give it to you now knowing that that’s going to equate to you doing a better job of solving it.” 

Joe Grover: [34:56] That’s the real sell.

Jake Bengtzen: [34:57] That’s the sell. 

Joe Grover: [34:58] How you define sell matters a lot. 

Jake Bengtzen: [34:59] “Money exchanges hands.”

Jake Bengtzen: [35:00] That’s right. 

Joe Grover: [35:01] You can’t go out and say, “Will you buy this?” Because that’s what a lot of entrepreneurs do, and everyone says yes. 

Jake Bengtzen: [35:05] I had a bunch of employers tell me yes. I went to a previous employer with 25,000 people who was like, “I want this. Yes.” 

Joe Grover: [35:12] “I’ll buy it.” 

Jake Bengtzen: [35:13] “I’ll buy it.”

Joe Grover: [35:13] And then you show up with the product, and they’re like—

Jake Bengtzen: [35:15] And you get the demo, and they’re like, “Oh, this is great.” And again, it’s like the health insurance plan conversation. It’s, “I like this. I want this. I’m afraid to show it to the people who actually buy it.”

Joe Grover: [35:28] There’s 15 people that have to opine on this, and there’s misaligned incentives—

Jake Bengtzen: [35:31] Sitting around a big table. 

Joe Grover: [35:34] Yeah, okay, so that was learning number one. So you’re finding yourself having a hard time selling through in these conversations, so you’re starting to look at other channels, right?

Jake Bengtzen: [35:43] I’m exploring every pivot.

Joe Grover: [35:46] Okay, thinking about product pivots, thinking about different applications. How did you work through that? Because, I mean, this was an 18-month journey, so it wasn’t like you’re at this for five years, so you had to move kind of fast. You weren’t paying yourself. You didn’t have a lot of runway, right? Hired a handful of people, right? You have a founding team building products, selling, marketing.

Jake Bengtzen: [36:06] Yeah, four people. And at a point, I just said, “All right, stop. Here’s what we’re going to do: We are going to identify areas where we think there are opportunities for innovation that align with the mission that we have and are somewhat within the realm of the technology we had built.” 

[36:26] And we spent six weeks—engineers, me, everybody, it was all-out blitz to talk to as many of them as possible. And that, to me, was the most invigorating part of the journey at Zipper. It was, we had—man, we met with hundreds of people. And it was LinkedIn cold connections. It was, “Hey, I talked to you. Can you introduce me to anybody who has this job function, this job function, this job function?” And we explored building a health plan. We explored functional medicine. We explored utilization management. Which is “How do you make things more efficient at the insurance level?” We explored prior authorizations. We explored clinical workflows. We explored “Why is it that we do all of this research to come up with better medical practices and procedures, yet it takes 10 years for it to get adopted in the real world?” We explored all of these things. And I think the big learning from all of those was there were a few that were really interesting based on the problem we want to solve, which was lowering the cost of care for a consumer. But they were really, really complicated; for example, starting a health plan.

Joe Grover: [37:51] Sure.

Jake Bengtzen: [37:51] It requires a lot of money, and it didn’t feel like our strong suit was going and building a health insurance plan. And after 18 months of hitting your head against a wall and thinking you can make a difference in an industry that really needs it, my biggest concern and what led to me grappling with this decision to shut it down or not was, “We’re out of money. We’re not paying ourselves. Financial runway is low.” To be totally candid and honest, it was to the point where I’ve got two months before I’m paying my mortgage out of a HELOC. I’m using the equity in my house to pay down the loan on my house.

Joe Grover: [38:35] So you are out of gas. You’re empty. Running on fumes. Personally—

Jake Bengtzen: [38:39] I’ve got three young kids. 

Joe Grover: [38:40] You’ve got a family. 

Jake Bengtzen: [38:41] I’ve got a family. I’ve got a fourth on the way now.

Joe Grover: [38:4] Congratulations.

Jake Bengtzen: [38:45] Which is new. That did not factor into my decision at the time because that was not part of it. But it was like, “There’s some real tough decisions that we have to make. Do we feel like there is enough of an inflection, enough of something moving in the direction, that will help lower the cost of healthcare for consumers that merits us raising money or going in this specific direction and having the confidence that it will work out?” And going through all of the things that we went through, we were grinding like crazy to try and figure it out. And there were a few things that had some legs, like the utilization management. That one had legs. But the whole problem we were solving was “How do we help the insurance company hold on to more of the money that they get?” It wasn’t “How can we lower the cost of care?” It was “How do we help insurance not pay doctors? How do we help them hit that 20% number?” 

Joe Grover: [39:50] So not mission driven.

Jake Bengtzen: [39:53] It was not mission driven. It was, “We can go make money and build a business.” Did I want to do that? I didn’t. Because that’s not why I got into it.

Joe Grover: [39:58] If you had more time, if you had more money, would you have kept going? Because it’s not a lot of time to build anything.

Jake Bengtzen: [40:11] No. It’s not. 

Joe Grover: [40:15] And so I guess my question is if you had twice as—three years? If you had five years?

Jake Bengtzen: [40:23] Yeah, I think I would have. Because—and this is where we get into failure: When I was in high school, there’s this movie called Glory Road, and it talks about the Texas Western basketball team, which was the first team to play five African-Americans at one time. And in the national championship, there were seven people who played for Texas Western, and they were all African American. And in the movie Glory Road, it talks about the story of how revolutionary that was. One of my favorite movies. I absolutely love it. And one of the players on the team came and spoke to my basketball team in high school. And in the movie, there’s a scene: His name is Nevil Shed. He gets hit in the face. He’s bleeding. He comes, he goes off the court, and he comes back with a catcher’s mask on. He says, “Coach, I’m ready to play.” Well, prior to that, he was struggling. He wasn’t giving it his all, and the coach knew that he had more in him. And the coach said to him, “Nevil, you quit now, you quit every day for the rest of your life.” I’m a sophomore in high school. I meet him. I admire him to the end of the earth for what he did and what he went through. So I write that quote on an index card, and it’s in my bedroom. And a quote that is ingrained in my head. So I get to this point with Zipper, and the first thing I think to myself is, “I’m not a quitter, because if I quit now, I quit every day the rest of my life.”

[42:10] If I wouldn’t have had somewhat of a forcing function to really dig in and think about that, of course I would have kept going. I would have said, “We’ve got the money. We’ll just pivot. We’ll figure something else out. We’ll continue to try and solve this problem.” I am grateful that I had some of those forcing functions, because not only did it force us into making a decision, it also made me rethink what that quote means. I still believe it. I still love the quote. But the way I think about it now is different than how I thought about it every single day up to that point. Because to me, quitting and failure are two very different things, but in that moment, they were the same thing. And that weighed on me. I couldn’t sleep. I was really grumpy at home. My kids would do one little thing that annoyed me, and I would just—I couldn’t handle it. And so, yeah, we would still be going, I think.

[43:22] But for reasons that I now believe, I’m grateful that it went the way that it went because of the personal learning that came from it. I think it’s so much more powerful in the learning. Part of entrepreneurship for me is the learning and the growth. And Michael Jordan has this famous quote: “I missed 9,000 shots. I lost 300 games. Twenty-six times, I was trusted to make the game-winning shot, and I missed it.” Failure is crucial on the path to success. And now I look back at that, and I think it wasn’t that I missed a shot. It’s kind of like I lost a game. And it hurts. But I’ve done a better job of forgetting what happened in terms of the outcome while remembering the journey in terms of the learning and spending more time on what’s to come rather than the thing that I can’t change that’s behind me.

Joe Grover: [44:20] When we talked, I think I remarked that you’re just in such a healthy headspace. And it took me seven years. Bubba Page was on this podcast.

Jake Bengtzen: [44:31] I’ve listened to that one. Yeah.

Joe Grover: [44:32] He’s like, “It took me seven years.” And then I thought, “Oh man, I wish that I could have had this conversation with you 15, 10 years ago.” Because it would have probably changed the way I process my own failures in business and entrepreneurship. I think it’s mature. It’s insightful. I love this idea that quitting and failure are different. How are they different? 

Jake Bengtzen: [44:56] One of the things I did, I looked up the definition of failure in Webster’s Dictionary. One of them is lack of success. I was like, “Ouch. I feel that.” I stumbled upon instead of looking at definitions, looking at synonyms for failure. One of them was negligence. I was like, “That’s really interesting. What is negligence? Negligence is just carelessness.” It’s like, “Am I being careless? No, I care so deeply about this.” To me, quitting, when I compare them, quitting is like, “I’m giving up. I’m not caring anymore.” Where, to me, failure was, “I tried, and it didn’t work.” So when I look at that quote now—“You quit now, you quit every day for the rest of your life”—I hope you’re failing all the time. I hope you’re trying to push the envelope and innovate and do meaningful things. I love sports. Right? The individual who won the batting average in the MLB this year—I’m not a big baseball fan, which is weird, because this is the stat that I use, but on my totem pole of sports, baseball’s at the bottom. Three, three, two. So 33.2 percent of the time that he steps up to the plate, he is “successful.” Yet he is the absolute best in baseball. So when I think about failure and quitting, quitting is “I’m just going to stop trying at anything.”

Joe Grover: [46:37] “I’m not going to step up to the plate again.”

Jake Bengtzen: [46:38] Yeah, “I’m not going to step up to the plate again.”

Joe Grover: [46:40] “I’m not even going to swing the bat, because I’m exhausted, because I’m—7 out of 10 times, I can’t hit the ball.”

Jake Bengtzen: [46:45] Yeah, failing is, “I stepped up and I swung.” Or even sometimes you don’t swing, and you strike out. That’s okay. It’s the whole analogy of, yeah, you fall over, but you get back up. And getting up doesn’t mean going to the same thing. That’s the other thing about failure. I was talking to an entrepreneur recently. I absolutely love him. Being so close to him has been helpful in this journey, and he’s incredibly successful on the outside. On the inside, he’s open with me about some of the struggles he has. And he said, “What would happen if your business failed?” He’s like, “Oh man, I can’t even imagine. It would be so devastating.” I was like, “Okay, I understand that. I felt that way a few months ago, but now I feel free.” And it’s because—I think you and I talked about this saying—there are a lot of people who choose unhappiness over uncertainty. And for me, the fear of failure was more about what happens after the failure than the failure itself. I feared shutting it down.

Joe Grover: [48:01] Yeah.

Jake Bengtzen: [48:06] But I feared more waking up the next morning, not building Zipper, having two months before I’m paying.

Joe Grover: [48:10] The decision to shut it down was not the thing that scared you the most? It was like, “Now what?”

Jake Bengtzen: [48:16] It was scary.Shutting it down was scary, but it’s a small event in a longer journey of like, “Okay, yeah, we shut it down. But what’s going to happen to my team? What’s going to happen to me? What am I going to do next? I feel lost.” Shutting this down—because part of me—I have this hole in my heart. Zipper was a huge part of me. They were like, “Who’s Jake?” I’m like, “I’m the cofounder and CEO of Zipper. That’s who I am. That’s who I am.” August 19, I woke up, and I’m now a failed founder with no money in the bank and this deep feeling of “I’m worthless because everything I was, I—” If you look at the other definition, a lack of success. And it was like—I wake up every day and put on sweats and, meh. It was hard. It still is hard. But being able to forget and say, “Failure is—the experiment didn’t work, and I’m pivoting.”

Joe Grover: [49:33] Yeah.

Jake Bengtzen: [49:33] Whereas quitting is, “I just give up.” I’m not going to give up.

Joe Grover: [49:36] I’m not going to try anymore.

Jake Bengtzen: [49:38] I’m going to pivot. And I’m still figuring out what’s next. I’m in the pivot. It’s still very fresh, but I’m in a much better headspace.

Joe Grover: [49:49] It’s amazing. Thank you just for being so vulnerable and open and raw about the whole experience. And I know it’s fresh. I often think about the word resilience, and I think on perseverance. And I think these are the characteristics that we look for in great entrepreneurs. We’re like, “They never give up.” We hear this.

[50:10] And I think we were too narrow in how we define that. We’re like, “They never give up on whatever investment or whatever venture they’re involved in.” And I’ve found myself actually creating a larger financial and business failure because I wasn’t going to give up and I wasn’t going to quit. And it was myopic, because the reality is we can actually minimize the magnitude of the failure if we make the decision earlier.

[50:45] And there’s always this really nagging question for an entrepreneur. That’s why I asked you the question, “If you had more money or time, would you still be doing this?” You might have had 25 million dollars or a hundred million dollars and five years, and you still would not have solved the 4-trillion-dollar problem. And so I just challenge entrepreneurs who are listening to this to ask themselves, “Is this the moment where—I’m not going to quit as an entrepreneur, but I need to close this chapter? Because this business, this product, this market, this sales motion is not working?” And if you have the courage to do that earlier in that journey, you actually minimize that. 

[51:27] If you would have been doing this for three or four or five years, you could have been in a worse spot, and you might have solved for it. But this hyper optimism that more money or more time will help solve for the lack of sales traction or poor uni economics—I’m just broadly speaking—and that is something that I think we have to guard against as entrepreneurs. What are your thoughts on that?

Jake Bengtzen: [51:52] We totally idolize people who go through really difficult things and come out on top. And oftentimes, we look at ourselves through that same lens of it almost shouldn’t be working because that means that if I succeed, it’s all that much better. And going back to the way that I framed my thinking then, that’s what I based my answer off of. I’m grateful that we were forced to stop, because it made me change the way that I think about this. I don’t—resilience is not—yeah, it’s not myopic, right? You talk about it being broader.

[52:33] For me, it was, “Yeah, I’m going to mourn this, but I’m going to be really introspective, and I’m going to learn and grow from it, and I’m going to continue to try.” One of the things that I did was I put out a LinkedIn post. And I was very vulnerable: “We failed. We shut it down. It hurts, and it stings.”

[52:52] The amount of people in healthcare who are executives or founders who reached out to me personally and expressed the feelings that they have of “I’ve been doing this for years, and it’s not working and it’s driving me crazy,” that actually blew me away. It was like, “Oh hey, I feel the same thing you feel, and I’ve been feeling this for a while, and we’re five years in, and it’s not working.” That hurt, because I’m looking at them like, “Oh man, that could have happened to me. It’s—back to entrepreneurship and success, success for me has always been through the eyes of others, and I think it’s really—I’m not perfect at this. I’m still trying. I’m struggling with this, because I’ll go to events. I went to one recently with a bunch of founders. And it’s like, “Well, what are you working on?” “Well, I’m working on being a better human being right now and figuring out who I am.”

Joe Grover: [54:00] It’s such a great, honest answer. 

Jake Bengtzen: [54:02] It’s hard because people look at that and they think, “Well, you’re not interesting,” or, “You’re not going to get me to this.” We tend to judge. 

Joe Grover: [54:10] Yeah.This has been insightful. And I was so grateful, and I am so excited to see what’s next. In fact, when you first sat down, I said, “Do you know?” And you’re like, “Not yet. I’m doing some consulting. I’m figuring it out.” But I think that the key is that you’re probably going to be batting 300, and so you’re going to step up to the plate again. You’re going to take another swing, and you might take one or two more, but you’re going to get that bat on that ball, and it’s going to be fun to watch that.

[54:40] And the LinkedIn posts will be different. And the learning from success is valuable, but the deep learning, not just about business and entrepreneurship, but about who you are and what you’re made of and what matters to you and how you want to operate. That learning, it comes from challenge, comes from the grind. It comes from maybe an eventual business failure. And that doesn’t define you as an entrepreneur at all. In fact, the response you’re getting from this LinkedIn post—which I want you to actually share as we conclude. I want you to read it, if you’re willing?

Jake Bengtzen: [55:16] Yeah, do you have it? 

Joe Grover: [55:17] Yeah, I got it right here. 

Jake Bengtzen: [55:18] Yeah, I don’t have my phone, so let me. I haven’t read this. I took a long time to write this, by the way.

Joe Grover: [55:23] Honestly, when I read it, I reached out and said, “Hey, we need to talk, because I loved that.” So close in proximity to the moment you shut that down, you were on LinkedIn saying, “This is what happened. This is how I feel about it.” But that response from the community should also tell you something that you can’t define yourself by the outcome of Zipper alone, and neither—the community is not defining you by this outcome. They’re defining you, and they’re really defining you by your response to the outcome. And so I think this is what’s so profound about your LinkedIn post, so go ahead and read it.

Jake Bengtzen: [56:01] Okay, I’ll read it. And quickly, before I read this, I had an investor tell me, “The best entrepreneurs run around walls, run through walls, under walls, over walls, but they also know which walls to stop.” And I think my post is somewhat along those lines, so I’ll read this. I haven’t read this in a while. This was probably the beginning of September: 

[56:29] “We made the difficult decision a couple weeks ago to shut down Zipper Health.

[56:36] “So many good things in my life have come from not giving up and digging deeper when everything (and everyone else) said that it was ok to give up. Part of what made this decision so difficult was the wrestle with whether or not shutting down the company was ‘giving up.’

[56:49] “Tl;dr - Our decision to shut down Zipper Health is not giving up.

[56:54] “Starting a company and being a Founder is hard. The highs are higher and the lows are lower. We had a few highs and our fair share of lows over the past 16 months. Everyone asks you how it is going and at times, that question is really hard to answer out loud. Most people think company building is hard but they quickly replace those thoughts by idolizing those who are “successful” in terms of big fundraising announcements and exits.

[57:20] “There are fewer people who, while respecting and admiring those who beat the odds, see it for what it actually is - the blood, sweat, and tears of giving it your all everyday to solve a problem that you care deeply about. Most of the time, that process isn’t glamorous.

[57:35] “And that is why I love company building. The best things in life are on the other side of hard.

[57:41] “It didn't turn out as we hoped - but we will keep grinding in other ways to solve the problems in this world that need to be solved. We are not done putting in the blood, sweat, and tears to make a difference. 

[57:50] “We will just be making that difference in other ways.

[57:53] “I am so grateful for those who gave their money, time, advice, and more to Zipper over the past 16 months.”

[57:41] And I said, “So, what is the next thing? Not sure yet - but I’m working on figuring that out as we speak. My goal is and always will be making a dent in the world. 

[58:06] “Onward and upward!”

Joe Grover: [58:08] Okay, love it. Thank you, Jake. The responses to your message were so powerful. And I love this one: “10/10 would (WILL!) back you again.” That to me is so—

Jake Bengtzen: [58:23] I love that guy.

Joe Grover: [58:25] —powerful, right? Tim, he’s got your back man.

Jake Bengtzen: [58:28] We’ll throw a shout out here to Tim. Tim was the one who told me that comment that I gave right before I read the post, which is, “The best entrepreneurs know. They run through walls. They run around walls. But they know which ones to stop at.”

Joe Grover: [58:41] Is he the one that said it? 

Jake Bengtzen: [58:41] That was Tim. 

Joe Grover: [58:42] This is so insightful. I want you to look at the camera and say whatever you want as your parting thought. Just a declarative statement.

Jake Bengtzen: [58:50] My name is Jake Benson. I’m a failed startup founder with my first company, Zipper. And failure and quitting are two very different things.

Joe Grover: [59:00] I love it. That’s perfect, Jake. You’re awesome.

Jake Bengtzen: [59:03] Joe, thank you.

Joe Grover: [59:04] Thanks for tuning in to The Real F Word. The real F word is failure, and remember that failure is a stepping stone; it’s not just a stumbling block. Join us next time as we continue to explore the journey of resilience and growth, without ignoring the true costs personally, professionally, and financially that comes with failure. Keep learning, keep growing, and keep embracing the real stories of entrepreneurship. See you next time.