Identity Acceptance with Riley Hughes

In this week’s episode, I speak with Riley Hughes, Co-founder & CEO of Trinsic.

Riley tells his digital identity origin story from early days as one of the first employees of ⁠Sovrin Foundation⁠ to leading an innovative identity acceptance network at Trinsic.

I met Riley through his participation in ⁠PEAK IDV⁠ DEMO DAY. We discuss his company's reusable identity infrastructure, their new network, and why he started his podcast series, The Future of Identity.

RESOURCES:

Connecting with Riley Hughes

Riley Hughes’ LinkedIn: https://www.linkedin.com/in/rileyparkerhughes/

Trinsic’s website: https://trinsic.id/

Companies & Resources Discussed

Trinsic is a digital identity company that has created the first Identity Acceptance Network. It augments identity verification with acceptance of 60 million pre-verified users.

Tomislav Markovski, Co-founder and Chief Technology Officer at Trinsic

Michael Boyd, Co-founder and Chief Product Officer at Trinsic

Sovrin Foundation is a nonprofit organization established to administer the Governance Framework governing the Sovrin Network, a public service utility enabling self-sovereign identity on the internet.

Goldman Sachs is a global financial institution that delivers a broad range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals.

McKinsey & Company is a global management consulting firm committed to helping organizations accelerate sustainable and inclusive growth. It works with clients across the private, public, and social sectors to solve complex problems and create positive change for all their stakeholders.

Gavin Christensen is the founder and managing director at Kickstart Seed Fund. The Kickstart fund is a venture capital fund backing the bold entrepreneurs with capital, community, and expertise.

Onfido is a digital identity platform that makes it easy for people to access services by digitally verifying them using its Real Identity Platform. The platform allows businesses to tailor verification methods to individual user and market needs in a no-code, orchestration layer. Onfido was acquired by Entrust in April 2024.

Veriff is an identity verification platform partner for the world's most innovative growth-driven organizations. It provides advanced technology that combines AI-powered automation with reinforced learning from human feedback, deep insights, and expertise.

Intellicheck is an identity company that delivers on-demand digital identity validation solutions for KYC, fraud, and age verification needs. Intellicheck validates both digital and physical identities for financial services, fintech companies, BNPL providers, e-commerce, and retail commerce businesses, law enforcement and government agencies across North America.

Jumio is an identity proofing and verification platform that provides advanced identity verification, risk signals and compliance solutions that help accurately establish, maintain and reassert trust.

Mitek Systems is a digital access provider, founded to bridge the physical and digital worlds. Mitek’s identity verification technologies and global platform make digital access faster and more secure than ever, providing companies new levels of control, deployment ease and operation, while protecting the entire customer journey.

Torn Scooters was founded by Riley Hughes as a teenager to wholesale and retail innovative handlebars for Razor Scooters.

Uber is a ride sharing company that recently announced the launch of a new rider verification process to help confirm that our users are who they say they are.

Stripe is a financial infrastructure platform for businesses. Millions of companies, from the world's largest to the most ambitious startups, choose Stripe to process payments, increase revenue, and accelerate new business opportunities.

Plaid is a global data network that powers the tools millions of people rely on to live a healthier financial life. Its ambition is to facilitate a more inclusive, competitive, and mutually beneficial financial system by simplifying payments, revolutionizing lending, and leading the fight against fraud.

FULL EPISODE TRANSCRIPT

Steve Craig: Welcome to the PEAK IDV EXECUTIVE SERIES video podcast, where I speak with executives, leaders, founders, and change makers in the digital identity space. I'm your host, Steve Craig, Founder and Chief Enablement officer of PEAK IDV. For our audience, this is a video first series. So if you're enjoying the audio version, please check out the video recording on executiveseries.peakidv.com, where you can watch the full episode. You can read the transcript and you can access any of the resources or links that come up in today's conversation. And in this week's episode, I'm thrilled to speak with Riley Hughes, Co-founder and CEO of Trinsic. Trinsic helps companies verify users 10x faster by accepting digital IDs that they already have.

Trinsic has also built the first Identity Acceptance Network, enabling acceptance of 60 million plus verified users. Riley co-founded Trinsic in 2019. And prior to starting Trinsic, he was the second employee hired by the Sovrin Foundation and established several teams in strategy, crypto economics, and business development.

A graduate of Brigham Young University, he's also worked in finance, social impact, and startup acceleration. Welcome, Riley, thank you for making the time to be on the podcast. 

Riley Hughes: Thanks a lot, Steve. I'm really excited to be here. 

Steve: Great. Well, let's get started. Can you share more about Trinsic? What's your typical elevator pitch?

Riley: Yeah, I mean, I think you gave a good, brief elevator pitch. We're building the first Identity Acceptance Network. So we help businesses verify users 10x faster by helping them accept existing digital IDs those users already have, right? So instead of re-verifying a user from scratch using a government ID and a selfie-- you know, in that whole process, if a user's already gotten their identity verified recently by somebody else or has a digital ID on their phone, like a mobile driver's license, then we help businesses, you know, leverage those existing identities instead of doing it again from scratch.

Steve: Excellent. Excellent. And I'm curious how you originally got involved in digital identity and more importantly, how you got connected to the Sovrin Foundation as one of their first employees?

Riley: This, this goes all the way back to college. I was the first person in my family to go to college. And when I got there, I, you know, didn't know-- I mean, it was like the world was open to me. I saw a lot of people go into, you know, be it a doctor or be a lawyer. And as I got involved in the business school, I noticed a lot of the smart, ambitious people that I, you know, aspire to sort of work with someday. We're going to work at companies like Goldman Sachs and McKinsey-- and at first I thought McKinsey was a woman's name. It turns out that that is a company name. But I was a little late to the party in terms of my preparation for getting these kinds of elite jobs out of college. And so I realized I needed an experience on my resume that would differentiate me. So I set out to find the most off the wall thing that I could find, and I ended up at a blockchain that's purpose built for identity as the first hire. And that is, you know, where I joined the Sovrin Foundation. And, you know, I really knew nothing about digital identity. I didn't realize digital identity was very interesting. I was actually quite a crypto skeptic at the time as well. So it was a nice blend of experiences that exposed me both to, you know, this whole new world of identity, as well as giving me my first foray into my professional career.

Steve: No, that's an excellent background. And congratulations on being the first in your family to graduate college, it's a massive accomplishment. 

Riley: Yeah, thanks. 

Steve: I should say that as well because I have a very similar background. I was also one of-- the first person in my family to actually go to college, which is great.

Now, for your time at Sovereign, I saw on your LinkedIn profile that you led multiple teams. Ultimately, though, you embarked on your own with Trinsic. Can you share the origin story of how the company got started? In particular, take us back to something called Street Cred ID. 

Riley: Absolutely. So I was at sovereign for almost two years and when I joined Sovereign-- when I was interviewing I heard about credit unions that were going to be rolling out decentralized identity or self sovereign identity to millions of users. And I heard about, you know, big healthcare system-- health systems that were doing a similar thing. And I looked at the list of companies that were involved with Sovereign at the time. When I joined, although Sovereign didn't have any employees, I did have an initial network and it had a board of directors and it had some initial corporations that were involved. And these looked like reputable corporations, groups like IBM.

And I thought, You know, wow, this is going to be huge. And two years later, despite, you know, growing the network from the initial six partners that I mentioned when I joined up to, you know, over a hundred partners in the network when I left. And all this interest, there was virtually zero real world adoption.

And there was such a gap between the ferocious interest and the dearth of adoption. That I felt like there had to be something missing, right? I mean, if there was just a product that these businesses could pick up, I mean, they're obviously involved with Sovrin for some reason, right? To solve some problems.

And if there were a product that these businesses could just pick up to address that problem or need or whatever it was that was driving them to work with Sovereign, then they would be doing it and going to production, right? Like, I'm like, “well, there's got to be something missing here.

So we started Street Cred ID, which is the original name of our company to address that product market fit gap. And, after, you know, existing as Street Cred for almost a year, we changed the name to Trinsic. But the mission's always been the same. It's been, you know, try to accelerate adoption of reusable identity or, you know, user controlled identity that makes people's lives easier.

Steve: That's great. That's great background. And you started Street Cred and now Trinsic with the team, right? You have a co-founder or several co-founders. Like, can you describe-- is that co-founding team and how you met? 

Riley: Yeah, I have two co-founders, Michael and Tomislav. Michael's a longtime friend and actually when I started at Sovereign and I got involved, I mentioned to you that already that I was really excited about what was happening and it seemed crazy to me. Like, you know, in this day and age, we're sending people to outer space and we're editing genes and making AI that can do all kinds of incredible things, and yet the best identity companies at the time were raising these massive rounds of big valuations to help businesses take photographs of physical cards and selfies, right?

And it's just like, clearly, digital identity is going to be a lot better. So I reached out to my longtime friend, Michael, and said, you've got to join me here at Sovereign. And he ended up joining as the first software engineer at Sovereign. And at the same time, there was an engineer building in the Sovereign open source community who started up around the same time as us. And he was the major contributor to a lot of the open source repositories in the kind of Sovereign ecosystem. And, he was kind of known as the, you know, rockstar engineer that really, you know, spoke through code kind of thing, right? And was one of the most authoritative voices in the room, not because he's the loudest, but because he, you know, ships code. And so we got together-- I, you know, reached out to Tomislav and Michael and said, “Hey, I think, you know, I want to-- I want to do something here and I think we can-- you know, I think we're the dream team.” And so we got together and started the company and the rest is history, I guess. 

Steve: That's great. I'll be sure to link both of the profiles of your co-founders into this episode. When I was looking into your background, I also see that Trinsic and Street Cred were not your first business venture. Actually went on a little bit of a rabbit hole dive into some of your background around your early business and some of your early YouTube stuff you have out there. I saw this quote for a video you had, “Riley is a boss,” and it was related to some stuff you're doing with scooters and then your company Torn Scooters.

Can you share more about that business? It's completely different than identity, but I thought it was very interesting. 

Riley: Yeah. Yeah. This is quite the deep dive back into my past. So good job on your research there. My first business that I started was-- I went door to door asking people if they wanted me to sell their stuff on eBay for them.

The one right after that was, freestyle scooter brand. And so I designed aftermarket parts for Razor Scooters. And, you know, contracted out fab shop to, you know, produce the goods. And then I wholesaled them to retail, you know, niche retail stores, both e-commerce and in-person stores. And, you know, promoted the brand via primarily via pro riders who we would sponsor.

And, you know, Razors-- Razor scootering 15, 20 years ago was really niche. Still-- obviously it's not like you see it in the X Games or anything, but it was a ton of fun. I loved it. It was my hobby and it also became my first kind of real business that I used to make money-- so help me pay for college and it was a great experience.

Steve: I'm curious from those early entrepreneurial efforts how that later influenced how you thought about building Street Cred and then ultimately transitioning to Trinsic? Like any particular lessons that came out of-- maybe even the door to door-- door knocks to get individuals to give you stuff to sell on eBay. Like, how do you think about that experience? 

Riley: I think the best takeaway from that, you know, freestyle-- manufacturing freestyles, scooter components, and, you know, digital identity are-- there's not a big overlap in the Venn Diagram there in terms of the subject matter, you know, but starting a company has a lot of similarities.

I think, really though, when I was 14 and started Torn Scooters, I didn't know anything, right? I didn't know anything about what I was doing. And I learned a lot on the job. And I think that that's been the same thing, you know, in my experience in digital identity. When I started at Sovereign, I really didn't know anything. And, quickly learned I had great mentors, fantastic people who are willing to take me under their wing and help me, you know, help me accelerate my learning curve. I also, you know, read a lot, spent a lot of time reading. But I think the-- you know, I just love life, fitting work around life instead of building my life around work. And I work a lot, but it's flexible, right? So I can take time, you know, to be with my kids or I can take time-- you know, in high school, to do fun high school things. And yet I could still-- you know, on the weekends or evenings or, you know, I play hooky from school to go to the fab shop to like check in on how the manufacturing of the latest run of handlebars is doing or whatever.

And I like that-- that kind of flexibility. So, and it's a good, you know, the remote working lifestyle. Although again, work a lot of hours, it can fit those hours around the important things in life in a way that is pretty cool. 

Steve: That's great. Those are great lessons to learn early in your life that you can be in command of creating your own employment as well as having that balance.

Now, I'd love to hear more about the early capitalization of the company. We heard your founding story, but how did you initially get the money to build the business and how did that progress? I think it was the Kick-- Kickstart Seed Fund that kicked off the project or kicked off the funding. 

Riley: When we started the company, Tomislav, my co-founder, who was building in the open source that I mentioned, he had some clients he was doing consulting for. And coming from the Sovrin Foundation, I had a handful of folks who I knew and understood their needs as well. And so when we started the company initially, we were originally capitalized and literally putting food on our table because we didn't pay ourselves anything, but we used the company card to buy ourselves food through consulting, right?

And we were developing a product alongside of it, but we were really doing services to validate that there were businesses that were willing to pay for whatever it was that we were going to be delivering. So we did that for a period and I actually met with-- we won a pitch contest and a pilot project with the city of Los Angeles in 2019 and did some LinkedIn posts about it.

And a venture capitalist, the founder of a Kickstart Seed Fund named Gavin Christensen saw that and he reached out and said, “Hey, I'd love to talk and learn more about what you're doing.” And I went into the office, pitched him and 15 minutes in, he's like, “you know, this sounds kind of familiar, have you ever heard of a company called Sovrin Foundation?” And I said, “well, funny, you should ask,” right? Like, “yes, I have.” And he goes, “wait, wait, wait, did you just pitch me a blockchain company without mentioning the word blockchain?” And I said, “Well, yeah, I mean, it's a, you know, it's-- it's not the core part of what we're doing, the most important thing is the problem we're solving, which is around identity.”

And, you know, in that moment, I think, he was-- he was excited and he said, “all right, well, I'd like to, you know, be in, I'd like to see if we can help.” And I said, “well, we're not raising money right now. We're going to wait because we're-- we're doing just fine on our own.” And I think that made them want to, you know, want to come into the round even more.

So ever since then, they've been tremendous partners. Ultimately, when COVID happened, there was a moment in time where the markets crashed, Sovereign kind of imploded. I mean, sovereign went from having 25 employees one day to the next day, having zero, they laid off everyone, including the whole executive team, the board of directors about a couple of weeks later, the entire board of directors resigned and a new board was brought in from scratch, right?

So there's a lot of tumult within the Sovrin Foundation, which was a core piece of the ecosystem in which we were operating. And, we knew that if we wanted to have more independence from that-- just that ecosystem, we needed to have more capital. And so we brought-- I reached back out to kickstart and ended up taking them up on their offer. And we're able to get a deal done with a, you know, a breakfast and a handshake and they honored the same terms that they offered, you know, months prior. And again, they've been-- they've been great partners ever since then. 

Steve: The pandemic has come up quite a few times in this podcast series because it's like a defining moment in digital identity and I remember when things were shutting down I sort of think like pre-lockdown and post-lockdown and how behaviors changed. And I remember that that run up-- it was like all the restaurants were closed. All the toilet paper is gone. Like what is going on in the world? And the digital ID companies at first, I think there was a lot of fear and concern. But then that summer of 2020 into 2021 went bananas because all things were now digital.

And this problem really got highlighted as fraud ramped within that 2020, 2021, ultimately you raised more money. You raised an 8.5 million seed, which is massive for seed. What were the early signs sort of coming out of Kickstart Seed Fund into getting to that seed from traction that enabled you to secure that that level of funding, 

Riley: You know, that was in-- we closed that in kind of mid 2022. It was right about the last month that that sort of a seed round was possible, you know, I mean-- it was-- we were already on the way, kind of, curbing-- you know-- the hype was curbing down and people were getting a little more level headed. And so we kind of just happenstance happened to have, you know, good timing there, you know, there were a handful of drivers. I mean, we really-- just to be blunt-- built a product that a lot of people really loved. We had hundreds of developers using our platform on a monthly basis, hundreds of developers that were building all kinds of interesting projects.

And although our-- you know-- we had, you know, revenue traction for sure, but I don't think that was the primary driver of our valuation. I think it was primarily driven by the level of adoption by the developer community and the feedback from the developers and businesses that were using our platform, you know, which is a big testament to, again, both my co-founders, who are technical co-founders, have a knack for building developer tools and, you know, good product.

And so we had a large developer community and then we also had a handful of, call it a dozen or maybe less than a half a dozen COVID related projects that were built on Trinsic. So a COVID vaccine passport for Southeast Asia, a COVID test result wallet for employment, you know, employment compliance in Eastern Europe, right?

I mean, all these different COVID related applications that used verifiable credentials and wallets to solve problems in that time period and a lot of them were built on our stack and were succeeding. And so that was another reason for the round.

Steve: Well, your timing was impeccable because right going into summer of ‘22, we started to see the economy shake a little bit, right, with the inflation getting out of control and then rates going up and a lot of the venture capital started to dry up and to ‘22 and then 2023 was really tough for many companies. So congratulations on, now, in that race and taking you through 2023 and we're now in 2024. What does Trinsic look like today? Like what is your team size? I think you mentioned your-- are you a remote first company? Can you share a little bit more about what you look like today? 

Riley: Yeah. I mean, one thing I'll say is we raised a seed round that ended up being a little bit more money than we initially anticipated. And after we closed the round-- I'm an optimist-- I'm also-- I also try to be a realist. I try to interrogate my optimism a little bit with facts and try to think like an investor or think like a, you know, whatever. And while We had a lot of traction at that time in 2022, I wasn't convinced we had really nailed product market fit yet, which is interesting because we had hundreds of people who like loved our product.

But, very few of those hundreds of people were really succeeding, right? So if you were a developer that wanted to build something using verifiable credentials, we were a fantastic solution and you loved us, but that doesn't mean the thing that you built would work. You know what I mean? Didn't mean the thing that you were building would have success and I also had a lot of skepticism toward a lot of the COVID related, like COVID vaccine credentials or something at that time.

I had skepticism that that would be a persistent or durable use case for us, right? Like I sort of envisioned that eventually going away. And so, this is all to say that once we raised that seed round, we didn't increase our burn rate very much. So we still have a lot of that capital in the bank and we've, you know, been pretty disciplined about how we've hired and how we've spent. So our team size is still around 15 people and I think it was maybe 12 or 13 before we did the big raise. That gives you a sense of kind of how things have evolved.

We spent a lot of time in the weeds iterating through many, many, many combinations of factors to try to derive what that optimal sort of product market fit will eventually look like. And, you know, the Identity Acceptance Network that we launched recently is, you know, sort of the culmination of a lot of that work over years of time, trying to find the right-- you know, what is the real value here? What use case is adoptable today? And so now we feel more optimistic than ever. I-- we just sent a-- an offer out to a new team member, that I think is going to make a big impact, yesterday. So we're starting to accelerate now for sure. But yeah, hopefully that gives you a sense of where we're at.

Steve: That's great. Well, I think being conservative and really culling your optimism and make sure you're balanced and that is important. And I've seen in the last few years in this market, companies that have raised hundreds of millions of dollars, and they've spent hundreds of millions of dollars in marketing and ramping team size. And then when the market contracted a little bit, it was tough. 

Let's dive into what you just mentioned. Your new Identity Acceptance Network; I love that project. And this to me looks like this bridging of fragmentation we see in the ecosystem. How did you come up with that concept? Or was it like a natural evolution from the infrastructure that you already had?

Riley: Yeah, it was a natural evolution I would say. I mean, again, we started as a platform for people to build wallets and verifiable credentials. The first step to getting a user onboarded into your wallet, generally speaking, is you've got to do some identity proofing to make sure you're issuing the right credential to the right user.

So, you know, naturally as my co-founder, our chief product officer, does his job of figuring out, you know, what problems can we solve for you he noticed, you know, 80 percent of our customers or something would go out and do a search for a vendor. You know, they'd look at Onfido and Veriff and IntelliCheck and Jumio and Mitek and, you know, you go down the list of-- there's a handful of these providers.

They'd pick one and they would integrate it into the wallet app as the onboarding flow. And we thought, “oh, well, we could-- we could help do that as well.” So we struck a partnership with one of these providers, added it into our platform, right? And started offering that. And there was a day where I went through my-- you know, I was using one of our customers' apps just for fun to see, you know, how does this work? And I was going through and onboarding into their app and I had to do an identity verification with a doc scan and a selfie. And I realized, wait, I just did this last week with another customer's app. These are both identity wallets that are using Trinsic. They're both built on verifiable credentials. And the whole idea there is interoperable or like transitive trust properties, right? You can present a credential, reuse your identity credentials multiple times. And I'm like, “wait a minute, these are like the earliest of the early adopters of this technology. And yet I can't prove my identity from one wallet app into-- to onboard into another wallet app. ‘Huh,’ that's interesting.” 

And as we started going down this road of like, how do we actually make reusable identity a real thing? What we saw is, as you mentioned, a lot of fragmentation in the space. Our Identity Acceptance Network is going out and partnering with all of them. I think we're at more than two dozen partners now.

And our objective is to try to bring some consolidation or aggregation into a very, very fragmented space to make reusable identity practically useful for a business. Because think about it, if you're a business and your addressable market is hundreds of millions of people, perhaps across different geographies, and your IDV vendor has six million verified identities in their ecosystem-- I mean, as a startup, six million users, wow, that sounds like a lot, but to a big enterprise, six million is a fraction of a percent of your user base. So it's really not going to move the needle for you very much. But if we can, you know, go out and aggregate-- we did our initial launch recently with 60 million users-- I mean that starts to scratch the surface at the actual-- you know, what portion of your user base can have a meaningfully better user experience because of reusable identity. And you know with the other partners that we'll be announcing soon, you know, I expect that that 60 million number to continue to grow rapidly. So what it's really doing is it's making reusable identity practically useful and valuable for businesses today.

Steve: Two of the companies that you mentioned are past employers of mine. And when I look at the market and the evolution of product strategies going back now, almost 10 years, reusable identity or decentralized identity or self sovereign or any of these names that often are conflated and-- you know, there are nuances to each approach-- it's always been the future or the vision or where we're headed. But we're still not there. Now it's 2024 and you're making a huge progress with this acceptance network. I think the other side of the acceptance is the consumer signing up for these services, creating that credential, and then knowing that, hey, it's going to be portable to the next place that they would verify their identity.

This cold start problem, I think in any multi sided marketplace is a challenge. How do you think we overcome the consumer adoption side of it? Or do you think that we're turning the corner on that now into the kind of the future for consumers? 

Riley: I think it's really, really hard with something like, a Self Sovereign Identity approach to overcome the chicken and egg problem. I mean, I've spent years literally, you know, trying to do that and thinking about that and working with partners on that. And, I think, you know, my optimism today is for solutions that don't require very much interaction from the user and that are already a part of their life. Which is the reason why we're focused on identity acceptance, you know, which is our spin our angle on identity verification, right?

Its identity verification workflows, including those of your past employers are embedded. First of all, they're embedded in a user's existing flow. They have to do it to get access to the stuff that they want to get. And it's basically the same every time they reuse it. It's not necessarily, you know, super different.

Whereas something like a-- I don't know, maybe think-- like a background check or something is there's going to be unique checks done and you-- and it's a little bit different every time that you do it. So I think that-- and while that's not entirely true, right-- I'm skipping over some nuances here, for the sake of the conversation-- it really doesn't require a lot more of the user to click a checkbox that says, “Yeah, sure, remember me for next time,” right? It's like saving a credit card information on a website. And sure, I still am reticent to let certain websites save my credit card information, you know, no doubt there will be hesitation from some users.

But I think that that's where just over time, the natural market forces of, you know, showing users value. People have to see it a few times. I remember last week I bought a concert ticket and the website asked me if I wanted to save my credit card and I said no. And then I realized that our-- some friends of ours wanted to come to the concert as well. So I went back through to buy more tickets and I had to reenter my stuff. And then I was like, okay, the second time I do this, sure I'll let you save my credit card because this was really annoying to have to redo it. And I just think it's going to take a few times. Users are going to have to see it a few times. The people who do it will have to get value a few times before this starts becoming much more of a norm. 

Steve: One of the other challenges, Riley, in this space that I've seen, specifically around all of the identity verification providers you listed, is they're all making money per click. It's very much a transactional space when it comes to identity verification. It starts to look a lot like Innovator's Dilemma, like a Blockbuster Netflix where, “Hey, I don't know if I want to go to reusable, even though that may be the future, because what happens to short term revenue when I'm no longer verifying that same user for the 20th time across the ecosystem?” 

What are the incentives in this new network that you're building? Or what do you think the incentive should be just in reasonable identity to make sure that those companies can still maintain revenue and grow? And then like, what are the, I guess, some of the challenges you faced, as you've pushed out the network? 

Riley: Yeah, the-- you are exactly right. You're calling out the exact objection that I have heard in every conversation I've ever had about this topic with the-- you know, anybody who has a transactional business model. So you're exactly right. 

I'll say two things here. The first thing is that I think if you can recognize that it is a potential cannibalization opportunity for your business or a potential risk to your business, you can also recognize that someone else can step in and do that if you don't, right? Objectively, you just got to do what's best for the customer. I mean, otherwise they will leave for whoever does the best thing for them, right? So I'm sure if you asked a lot of executives, “Would you prefer to erase the word reusable identity from everyone's memory and stick with the status quo forever?” They'd say “yes, absolutely.” But then if you say, “Well, given that you can't do that, how are you responding?” They'd say, “Well, we have a reusable identity strategy, right? We're moving in this direction.” So that's what I would say. I also think that there's a few layers to the onion, right? If you just look at this sort of top layer, it's easy to say, “Wow, once a user has a reusable identity, then we don't need to charge per click anymore.” Like, how do we manage that, right? If you peel back the layer of the onion a little bit more, as an identity verification company, you have been hired to deliver a verified user along with some information about the quality and efficacy of that verification to a business. And the business is going to do some decisioning around that and perhaps some other checks to sort of make a decision about what they want to do with that user.

Uber just announced that they will start verifying all the riders of Ubers. Why did it take Uber this long just to announce that they're going to verify riders? This is, I mean, the intuitive answer to me is that they are-- it's super high friction, right? If you're a user and you're going to use Uber and they have to do-- you know, make you fish out your document and take a selfie and everything, you'll be like, “whatever, I’ll just go use Lyft.” You know what I mean? It's like-- but if a user can do it in like one click, right? If it were an Apple Pay like experience to just, boom, boom, get right through, of course they would have been doing this earlier. They would have stopped a bunch of fraud and other issues that they've had over the years.

And it's only finally now when the fraud problems-- the pain of the fraud exceeds the pain of the user churn and the user friction that they've ended up doing it. And that switch would have flipped much, much, much, much earlier if it were 10x faster to verify users. So I just think that with reusable identity, it's easy to be like, “Oh, the-- it's-- you know, we're going to cannibalize some of our business.” And that is so short sighted, in the long run, the market is going to get 10x bigger. And you're going to have way more transactions and be charging way more per click. And guess what, you're going to be doing more liveness checks. You're going to be doing more database checks. You're going to be doing more of the other sort of high margin add ons that you're already selling that, you know, they're good for your business.

So I really think it's a win-win for everybody, consumers, businesses, and ultimately the IDV companies that are powering it. 

Steve: In our industry, I feel like the thing that's held a lot of the progress back Is that ‘F’ word, friction, and many different companies have approached it where it's like friction is a good thing or it's friendly friction. But at the end of the day, end users, they don't like any steps in their way of getting their job to be done.

And then we've seen the rise of the other ‘F’ word, fraud. And so we've got friction and fraud and this balance-- I think there's a model around free, you know, yet another ‘F’ word. We've seen big tech companies like Facebook with Facebook sign in and Google with Google sign in. They've made it really easy for users to leverage their federated sign in where it's just a couple of clicks and you don't have to fill out your name and your email and all these things.

But those companies have financial incentives that are deeply tied to ad revenue and controlling that user data. In this model and this acceptance network, where does the data reside? Is it centralized? Like who maintains the identity itself after it's been created? 

Riley: Yeah, we are a network of reusable identity providers and each reusable identity provider has a little different approach and I think this is going to be super healthy.

I mean, we're going to see what the market takes up, right? What does the market adopt? Does the market adopt the solutions that are, you know, built with a username, password and database? Does the market adopt solutions that require users to download mobile apps? Will the market adopt solutions that-- and by the way, mobile apps, meaning the user holds all of their own data on their own device. Or will the market adopt some hybrid solution, which is-- you know, tries to strike a balance between those two with maybe decentralized storage or local-- localized keys, right? We will see-- we'll see how the market evolves. But again, of the two dozen plus providers of reusable identity that are in our network, each one basically does a different thing, and all of the aforementioned approaches are represented. 

Steve: The other potential evolution in the market, and I've seen this with payments companies like Stripe and Plaid who've created identity verification capabilities, is they give that stuff away free. They say you're still going to go through an experience. It's still going to be one to one. It's a transaction, but we want to onboard you into our payments ecosystem because there's recurring value and there's, you know, ongoing transactional percentages that get charged. Do you think we'll see more models like that where some of these identity verification companies are offering the verification for free or as part of a bigger solution?

Riley: Yeah, I think it will be-- likely be challenging for businesses whose entire recurring revenue base is transactional to switch to something where they're offering it for free. I think that challengers and sort of insurgents in the space will experiment with different business models like that. I'm aware of one company that does, you know, if it's a reusable ID verification, then they charge you if it's not a reusable ID-- if it's a from scratch, document scan based ID then they'll do it for free and their bet is on the long term long tail of reusable identity transactions for each user. And they are thinking the winner in this space is not going to be the one that captures the most transaction revenue over the next two years. It's going to be the one with the biggest network. So let's really go all in on building the biggest user base and a great consumer product. So, you know, we'll see how these shake out.

It's really hard to tell. You know, if you would have asked somebody, you know, what's going to win VHS or Betamax-- are you going to ask somebody, you know, what's going to win between, you know, whatever, pick your two standards. 

Steve: Yeah, I like, I like that reference to VHS and Betamax. And then, you later had, was it Blu-ray and HD DVD? There was a bake off and it all comes down ultimately to network and distribution, right. If you don't have the number of devices that can accept that particular, you know, in this case it was media, but if it's an identity credential, then it doesn't matter if it has, I don't know, better technology or certain aspects of it if you don't have the user base.

Well Riley we're coming up on time. I want to be respectful of the time we have here. You just mentioned your podcast series, which is one of the things I wanted to talk with you about, The Future of Identity is your podcast series. I'm curious what inspired you to start that? I'd love to hear the origin story on that.

Riley: I just kept seeing people make the same mistakes over and over. And I thought, like, man, if there are a lot of-- I mean, I saw somebody do this two years ago, the exact same thing, or Trinsic did this two years ago and I know exactly why that won't work. And I just wish there was some way to insight out there a little more broadly, specifically for reusable identity projects.

And so what we've tried to do is bring on, you know, leaders who are actually in the trenches getting a product market, right? These maybe-- maybe they'll be at a conference and if they are, they're speaking and then they're jetting right back out to meet with a customer or something, right? These are the people really in the trenches building reusable identity stuff and getting them on to just ask them about their journey and, tactically speaking, how did they go from zero to one? How did they get the first product out? What was the first product problem that is solved and what lessons can we extract from that? And, every episode try to drill into-- to those tactical details. So, you know, I think if you're somebody building reusable identity stuff, it's going to be a really interesting listen for you.

And I think if you're interested in consuming reusable IDs, it would give you a good sense of, kind of, the sausage making behind the scenes that goes into making it work. 

Steve: Well, Riley, before we close out on today's episode, if you've seen any of the EXECUTIVE SERIES episodes, I like to touch on things a little bit beyond the LinkedIn profile. And I was looking at your time in school and BYU, and I saw you were the VP of the Chinese Club and that you spent time teaching Mandarin Chinese or teaching Mandarin Chinese students. Would love to hear about that and how you got involved in Chinese culture and Chinese language. 

Riley: Yeah, I was really fortunate to-- you know, I volunteered to serve as a missionary, a service missionary for my church. And I was asked to go to Taiwan, which was a country that at the time, you know, I didn't have a choice in the matter. I thought that when they said Taiwan, I just thought Thailand. I was like, “Oh, great. Let's go get some Thai food.” I didn't-- I was, you know, as a naive high schooler, I didn't really, you know, have a good sense of geography there.

But yeah, I got asked to go live in Taiwan for a couple of years. Taught English, did service, and, you know, shared the message of the church that I was serving. And for two years and so learned Chinese, lived with Chinese families-- there were weeks where I never spoke any English and it was an incredibly life changing experience as you could imagine, as, you know, somebody who grew up on a ranch in Idaho.

So when I came back, you know, I wanted to keep up on some of the Chinese language and Chinese culture and it's something that I love and adore to this day. Particularly the, you know, island of Taiwan and the people of Taiwan will always have a special place in my heart. 

Steve: And are you fluent still to this day? Do you keep up with your language skills? 

Riley: It's funny. I think I don't know how you would measure fluency. I mean, I can definitely speak Chinese just fine. But I feel very embarrassed whenever I speak Chinese because I-- it has regressed so much, you know it used to be so much better. Like I used to be-- like I used to feel very very confident. And now I feel a little bashful about it. But yeah, I can, you know, still speak Chinese and still love to. And when I get the chance, once I get over the initial embarrassment of it.

Steve: Yeah. It's one of those where if you don't use it, you might lose it, but it does come back like riding a bike a little bit. If you were to go to Taiwan, I'm sure you'd be speaking pretty fluently after a few days. 

Riley: Yeah. I went to Taiwan after I got married-- went to Taiwan with my wife and met up with an old friend. Her first comment to me was that my Chinese was rotten. And I was like, “well, thanks.” And I went around the island and then a week later met back up with her in Taipei and she's like, “whoa, your Chinese is back to-- back to normal.”

So, you know, it does take some getting used to, you know, probably, you know, take some time. But yeah, if you don't use it, you-- it definitely gets rusty. And I'm-- I definitely feel rusty with it, but yeah, once you kind of get the initial rust off the gears, they start moving and things get a little easier.

Steve: Very cool. Very cool. Thank you for sharing that background. And I hope people now reach out to you and try to speak Chinese with you so you could practice. 

As we wrap up, Riley, what types of conversations would you be looking to have from anyone who's watching this or listening to this in the market. Any particular things that are interesting to you?

Riley: Yeah, I'm always interested in sharing insights and-- you know, that we've gained over time. I have a-- you know, I have my career in identity because of people who've been generous with me and I truly have stood on the shoulders of giants and learned from mistakes of people before me that accelerated my journey. And, you know, happy to do that with others as well. I also write and talk a lot about my experiences. So, you know, there's some good stuff there if you're interested in that as well. 

But commercially, right, there's two conversations that are interesting. The first one are companies that have a supply of reusable identities that want to monetize those reusable identities or have somebody help distribute those out to the market, right? That's what we would do for you. And, you know, our objective is to aggregate the entire reusable identity landscape under one roof. So if you're an identity verification company, or a wallet company, that does identity verification, then would love to talk to you about partnering and joining our Acceptance Network on the other end. These are businesses that need to verify identity, but don't like putting their users through as much friction as a document scan requires. And if possible, we will route your users to an existing ID they already have, letting them get through their process 10x faster. And if it's not possible to find a reusable ID for them, if they don't already have one, then you can just use your existing identity verification process. Or we can connect you with one of the dozens of partners that we work with that do this in a sort of world class way. 

So businesses that need to verify identities and sources of existing identity are both conversations that are very interesting. 

Steve: Excellent. Well, I will put a link to your website as well as to your LinkedIn profile in the episode notes. Riley, thank you so much for taking the time to speak with me on the podcast. I learned a ton from you and I'm sure the audience and listeners will as well. I appreciate your time today. 

Riley: Good, good. I appreciate it very much, Steve. And, you know, happy to chat anytime. It's always a pleasure.