Latest / Built by Margin with Laurie Chen / Building Trust for the Agentic Future: Decentralized Identity, Healthcare Fraud, and Startup Growth with Javier Casado-Cocero

Transcript

Building Trust for the Agentic Future: Decentralized Identity, Healthcare Fraud, and Startup Growth with Javier Casado-Cocero · Built by Margin with Laurie Chen

• 0:04
  Welcome to Built by Margin, where risk meets numbers and better decisions get made. I'm Lori Chen, cpa, fractional CFO and author of Risk Worthy. On this show we Explore how founders, CEOs and high performers think strategically, take intelligent risks, and use numbers to build what matters. Because great outcomes don't happen by accident. They're built by margin.
• 0:42
  Hello. Thank you for joining. Yeah, no, thanks for having me. Yes.
• 0:47
  So I am just going to ask you just a series of questions to kind of just explain your founder journey, your company, where you hope to go with it, maybe some just general financial questions, how you approach finance and business.
• 1:03
  And then I wanted to ask you what bio you want me to use because I'm going to record that separately and that will go at the beginning of the show. Sure. My name is Javier. I have been working on decentralized identity for several years. I graduated from Duke MBA not too long ago and while I was there I was exploring how to use decentralized technologies to identify individuals. Previously, the technology was used primarily for financial transactions. However, we realized that the technology is also very secure and is able to preserve privacy as well as prove data about individuals. And it was this that made us realize that we can use this technology to solve the identity problem. So I've been working on Valid for the past four years, essentially under a couple names now, and we're looking forward into solving anti fraud in health care as well as the AI agent identity access models. So knowing who's behind each agentic action, allowing agents to perform actions for doctors, allowing doctors to take responsibility for agentic actions as well and unlock the next era of healthcare.
• 2:15
  And you're also a principal co founder at Anonid. Yes. So Anonid is the underlying technology under Valid and Valid is the identity infrastructure that is built on top of. Okay, great.
• 2:29
  What inspired you to create this startup and who are, who else are you working with? So I'm working with David Lindsay Johnson, who is a serial entrepreneur who also sold his company to Clear, particularly in medical credentialing and general professional credentialing as well. And he was introduced to me during my MBA at Duke as an advisor. And he helped guide our identity product into a larger vision that also included credential verification and subsequent intent and action verification remotely, which we quickly learned was ideal for AI security and AI governance.
• 3:10
  We're currently speaking to many customers, potential customers as well, that are interested in securing their agents, knowing who's behind each agentic action and still letting the agents perform actions on behalf of users without Exposing secure credentials or having too much risks of breaches and exposures. What does your business model look like? Is it subscription or membership or interaction?
• 3:35
  A combination where you have a minimum essentially and then after said minimum it's a per verification, per usage based model. Okay, how did you come up with that model? Like what did you do to test that?
• 3:50
  So we primarily did comparative analysis with some other similar companies in the space and then we ran essentially in communications with our customers different sorts of proposals of pricings and depending on specific needs.
• 4:05
  So larger enterprises are looking more towards subscription based models and then smaller businesses and startups are looking more at a per verification basis. So we're able to build and tailor packages depending on their needs and again those based off of some comparative analysis as well as customer interviews and previous experience in the space. So David, also my co founder, has 10 years experience with credentialing and credential verification, so we have a lot of experience in the industry there as well. When building your model, did you use any form of AI to validate any of your hypothesis? So we used AI primarily for some, some extra market research as well as editing and establishment of some of the longer multi year models and financial projections as well as some customer acquisition costs based off of different water flows depending on certain assumptions that we were able to build. So it allowed us to take our pro forma to the next level, especially as we were able to integrate those models more directly into the Excel frameworks itself. Oh, okay. Yeah, I'm as a fractional CFO myself, I'm very interested in how startups in the rise of AI era are utilizing AI to drive their financial models.
• 5:27
  So that, that's very fascinating to hear that.
• 5:31
  What, what AI tools are you actively using in your operations currently? So we're currently using a combination of, I'd say primarily Claude and Gemini just because of the way that they interact with the different documentations across our Google Drives. And then Claude's also able to synthesize that information into some higher level analysis and analytical models and is able to actually build out the models within Excel which then we're able to export back into Gemini.
• 6:04
  So we're able to basically use both of those models to build what we need. And the team also sort of uses ChatGPT for more easy access things. But primarily Claude and Gemini combined again on that Google workspace for the financial models.
• 6:24
  Okay, and then, okay, so you mentioned that you're a recent Duke MBA graduate. How have you utilized the Fuqua network and just the resources in entrepreneurship and Innovation at Duke to help you especially build this particular startup. I know your connection to.
• 6:43
  What was his name? David Johnson, the co founder. Yeah, your connection to David, obviously. But beyond that, what other resources have helped from the network? So essentially connecting to the innovation and entrepreneurship department at Duke. They have a solid program that spans across the multiple schools that allows you to analyze and sort of business test and take some ideas and some potential business models through the ringer.
• 7:10
  So I participated in the majority, if not all of the available programs, from student mentoring to external mentoring. And we've also had some experiential learning where we go to different sorts of pitch competitions and venture summits. And we were able to explore the industry and essentially battle test our idea a little bit while leveraging student credits, essentially. And it was a class format, so it was like an accelerator where students were paid with credits and founders were also able to leverage that and participate in some fundraising models and some different accelerators.
• 7:49
  So participate in the Melissa and Doug entrepreneurship accelerator as well as some of the other venture showcases and competitions throughout the Duke ecosystem. So they were very helpful and supportive throughout the getting off the ground and building out the initial stages. Do you have plans to raise VC money? We raised, we raised a round through Arteria Capital, who's also a Duke alum, and we plan on raising a subsequent round as well in 9 to 6 to 912 months.
• 8:23
  Okay. like the next key milestone of your product.
• 8:27
  Yeah, so we, we currently have a large enterprise customer and we're working on expanding into acquiring a few more large enterprise customers. And essentially the next round will be priced likely according to our ARR, of course, or MRR at the time and our month over month growth. So we're just building out as many, we're building out our customer pipeline as much as we can at the moment in anticipation for the next round.
• 8:54
  What are some other key metrics that you're tracking on a monthly basis? You mentioned ARR, Mr. You mentioned customer acquisition costs. Anything beyond that?
• 9:05
  Yeah. So we're also looking at contribution margin, of course, with considering our costs, leveraging a lot of these decentralized and newer technologies are allowing us to outperform some of the other industry standards in terms of methodology and output per capita, essentially.
• 9:24
  So by keeping track of again our costs, of course we're able to ensure that our margins are healthy. And I'd say that a lot of our research is around willingness to pay and value differentiation. Especially as a cybersecurity company, we have a lot of KPIs around fraud metric reductions as well as it counter time savings and other sorts of cost savings throughout the API stack.
• 9:54
  Fascinating. What are some of your other milestones that you're hoping to accomplish in the next six to 12 months? So we're currently in the stage of growth and scaling, so we've doubled, even tripled our team since our last raise and we're now starting to also double and triple, kind of like our customer calls and starting to really market into the cold networks as well as some of the warmer networks. We've been doing a lot of handoffs and really warm network stuff now and just going to expand a bit more as we've been able to invest some of these early resources into improving our branding and messaging. As with these sort of like Frontier and Edge technologies, a lot of the conversations with our customers are around our differentiating values as well as where we're able to provide and sort of raise the bar in terms of privacy and security in ways that our customers haven't quite been exposed to before. So there's a lot of education and we're also adding some metrics, kind of like keeping track of objections as well as objection handlings and doing some AB testing as well. So it's been just starting to rev up the that cycle.
• 11:16
  You mentioned that you already have an enterprise customer. Are you hoping to expand there with enterprise as well?
• 11:24
  Yes. So the enterprise customer also has their respective networks. We're basically growing based off of again kind of like this warm network not only from our existing customer, but also from David's network and our investors network, where that existing customer actually also came from David's network. Again from his previous company that he sold to Clear. He had serviced a lot of these customers with similar aspects of our stack in the past and now we're able to come back to them with an enhanced, more efficient version that has some extra offerings that prepare them for the agentic feature.
• 11:57
  Now here's more of a background journey question.
• 12:01
  When you went to get your MBA at Fuqua, were you intending to join a startup such as this, or was that something that kind of came about after you kind of met more people, got the education, and was part of that ecosystem? So when I pivoted into an MBA with the intention of learning more about the entrepreneurial space and what it was like to grow and develop or join a startup? I kind of had some goals surrounding either starting a startup, joining a startup, or working in an entrepreneurial way as a as a technical product manager, kind of being able to own a product and grow it and develop it in that source. So that was sort of like my waterfall of goals.
• 12:48
  And again, I was fortunate enough and we were able to put in enough effort and do research to essentially continue to move along with that first stage and have that initial startup idea that I had going into it and continue to develop it to today. Okay, so yeah, that's really cool then. And when did you graduate? I graduated in 2024, so about two plus. Okay.
• 13:13
  Yeah, yeah. I was just in Durham a few weeks ago for the reunion weekend and it was great just to be back on campus, you know, see old friends, colleagues. A lot of people I missed as well. But it was just great being part of that environment and you know, being with other like minded people. It definitely changes your mindset about what you want to do and how you want to grow.
• 13:40
  Yeah, absolutely. I try to go back for. I was part of the president, part of the blockchain club as well. And we have an annual conference that I tend to go back to again, reconnect with that network. So going back is always fun. So you're currently based in New York.
• 13:55
  So David is currently based in New York. I'm living right now in Denver, Colorado. Oh, Denver.
• 14:02
  Okay. Update my LinkedIn stuff. Yeah. Okay. Yeah.
• 14:06
  And then your company, is it. Did you decide to structure it as a C Corp in order to get more investors or is it structured more as a llc? We were originally in an llc, a partnership, et cetera. And then we converted into a C Corp essentially at the request of investors. So if you had to do it over again, would you have rather started out as C Corp so you don't have to make that transfer? Probably, yeah. I mean it's, it's hard to know how fast things are going to move at the beginning.
• 14:44
  So you know, there's a world where whereas in an LLC level for longer. But of course hindsight's 2020 probably. Okay. Yeah.
• 14:56
  I think if you're intending to get investment outside capital, I would always recommend starting with the C Corp structure. Not necessarily Delaware C Corp, but just a C Corp. But Delaware C Corp probably has the least amount of rules and costs. It's rather low cost, but compliance can be a little bit tricky because you have to file annual reports, pay annual taxes. But I think compared to other C Corps, it's probably the least amount of paperwork. Yeah, I think we have a Delaware C Corp.
• 15:33
  Okay. Are there any other particular challenges that you faced in building a tech naval startup like this that you want to share?
• 15:49
  Well, it's, it's Been a.
• 15:53
  I'd say that the most interesting one thing that's difficult, particularly when growing out the team in a tech startup where everyone's remote as well, is just, of course, keeping everyone kind of engaged and on the same page and at the same time trying to find ways for all of us to connect. But it also has had its advantages where people are able to, of course, live what they want to live, and we're able to cover multiple time zones. For example, we're able to send team members to conferences in California, Colorado, New York and nearby areas.
• 16:32
  So essentially just balancing out a remote team, team, tech type of stack. And then as we bridge into marketing, getting more, especially with modern marketing, trying to balance, you know, leveraging social media and virality while still staying serious and professional has been interesting. But again, we're growing our team to. To manage that. And yeah, again, with. With things being remote, it's.
• 17:04
  You have to work extra hard to make sure that you're engaged with people and getting everyone's opinions and synthesizing those efficiently is what I'd say.
• 17:17
  Okay. Is there anything that you've learned from a leadership standpoint that you think is really valuable to share?
• 17:28
  I think that at times there's always some sort of pressure or expectation to showcase success and stay optimistic, and that can at times cause certain things to not necessarily fall through the cracks, but sometimes you'll prioritize moving fast and getting a lot of things done. And sometimes it's important to remember to just double check and dot your I's and cross your t's, but it's always a push and pull because you. One of your advantages is how fast you're able to move too. So balancing that with your particular climate is important. Thanks for sharing that.
• 18:17
  So we are going to link your LinkedIn page to the podcast when it publishes. But how can people find valid is valid on social media or is there a website that you rather point listeners to? We have the LinkedIn, my LinkedIn, the company LinkedIn and then our site is valid ID and most information is there at valid ID. Okay, awesome. Well, yeah, we'll definitely share that and I just follow the valid on LinkedIn.
• 18:51
  Look to stay connected and hopefully see it grow pretty fast.
• 18:56
  Congratulations on the success so far and what you've raised and the enterprise customer. Sounds like there's a real trajectory here.
• 19:04
  Thanks, Laurie. Yeah, it's been a great journey and looking forward to stay connected with everyone at the Duke community and beyond. So always appreciate the opportunity to share more. Yeah, awesome.
• 19:16
  I'm Going to record, do some editing, make this part of the show, like all of that, that and then probably will be record republished within the next one to two weeks. And so there'll be announcement on LinkedIn as well as my Instagram if you follow there. But definitely on LinkedIn. I'll be doing posts and then there'll be a separate website page to showcase yourself and valid and our conversation here.
• 19:45
  Yeah, no, it's funny, I recently removed LinkedIn from my personal phone. But again, as we explore getting into marketing and things like that, we're, we're evaluating all the channels and again, just balancing, you know, being on Instagram and also being a security company is always an interesting back and forth. Yeah, we see some of our other industry people participate on social media, but often the cyber security platforms are participating at a lighter extent than some other industries. Oh yeah, that makes a lot of sense. Okay, yeah, I think it makes more sense to be on LinkedIn then. Yeah, so we'll continue to expand and evaluate and stay connected. Okay, cool. Well, thank you so much for your time and for joining and then yeah, I will send you a message once the podcast publishes and you can share it with your listeners. Great, thanks so much, Laurie. All right, thank you. Nice meeting you.
• 20:50
  Thanks for listening to Built by Margin. If this episode gave you a new way to think about risk, numbers or the decisions in front of you, share it with someone else, building something meaningful. And if you want more conversations like this, follow the show for insights on strategy, decision making and intelligent risk dynamic. Until next time, remember, take the risk, know your numbers and build with intention.