At 15, he made his first 250k reselling sneakers. He was also the youngest person in history to get accepted into Northwestern University. His passion for learning started early on when he felt like his teacher told him he wasn’t smart enough. As a result, in the 4th grade, he started to teach himself advanced Mathematics. He continued the same trend throughout highschool and finished early. He couldn't always afford to buy what his friends did so he came up with creative ways to make money as a teen. That combined with his passion for learning equipped him to become the CEO of Lendtable, a FinTech company that's revolutionizing the 401k space.
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Jonaed: Welcome to the 26th episode of the No Degree podcast. This is your host, Jonaed Iqbal and today's guest is Sheridan Clayborne. Where do I start? At the age of 15, Sheridan was accepted into Northwestern University. The youngest person in history to do so. He has always been an entrepreneur. He ran a sneaker reselling business that grows seven figures. He worked at Dropbox as a Product Manager at the age of 20. He is currently the Founder and CEO of Lendtable, a FinTech company that's revolutionizing the 401(k) space. Learn how Sheridan challenged ideas to get to where he is today. In this episode, there were some audio issues on my end. I'm truly sorry for that. Subscribe to our Patreon@patreon.com/nodegree. Every contribution is appreciated. This show is impossible without you. Let's get the show started.
Welcome Sheridan. Let's go back into your history. You have a very interesting career. What do you do now?
Sheridan: Currently I'm the co-founder of a company called Lendtable and high level what we do is one for Americans who have a 401(k) match, don't use it. And that's in large part because you've got people making 40, 50, 60K a year who just don't have the money to be able to get that $6,000 match that their company offers. So, if you're one of those people who has a 401(k) match but it doesn't have the money to able to use it, we will give you a cash advance today so that you can get 100% of your 401(k) match. By the time that that money vests, we'll help you withdraw. Essentially, we'll take as our service fee, 30%, but more importantly, the user will now have 70% of that 401(k) match that they wouldn't have had before.
Jonaed: You guys have to sort of wait like 40 years to collect or how does that work?
Sheridan: Yes, yes. So, the way it works now is essentially we help people do early withdrawals. Even if you're below the age of 60, we actually give you the money in six months. Once it vests, depending on your company, we'll help you through that withdrawal process. We'll actually show you how you take it out of your 401(k). There's always questions around like income tax and how that works. We'll both walk you through that process as well as just like cover all of those fees. So, that's 70% you're making, you know, that additional $5,000 you'll have in your 401(k) is entirely yours and you don't owe us anything else on top.
Jonaed: Wow. That's a very interesting business model because you're essentially giving money to people who would have never had it.
Sheridan: A core thesis to our business is that we want to become the first platform for providing these wealth building cash advances. The way we look at it is, and I know there's a lot of companies that say this all the time like we're here to make you money and it sounds like a scam, but really, the only way we make money is if we can create new wealth for our users. Because we take 30% of the profit, if we don't make you any profit, if we don't put more money in your bank account, we legitimately don't make anything. If anything, we'll lose money, if we don't make you any money.
Jonaed: Yes. I mean, it's a very interesting business model and it's just very unique, very forward thinking. So, let's kind of take it back. You’ve been involved, you have a very illustrious history. You're the youngest person to be accepted into Northwestern, as a 15yr old. And I know your entrepreneurship. You're only 20 years old at the time of this podcast. So, you obviously started early. What was the first entrepreneurial thing you did?
Sheridan: For me, it was always just like, I kind of grew up in an upper middle class community but had parents who were much more kind of like middle income. While I wasn't necessarily kind of disadvantaged growing up, I was always with my buddies and they were getting Chipotle and food and stuff like that. I was like, “Oh shit. I can't afford that.” For me, when I was young and the whole idea of entrepreneurship was, I don't want to say, to feed myself in the sense that I didn't have food, but it was like, wow, I really want to be able to buy Chipotle, but I don't have the money to get Chipotle. So, let's go make some Chipotle money.
The first startup I ever did, I was just selling random stuff when I was 11 and 12. I'd go outside, we have this local grocery store and I just post up outside of there for like eight hours and I just talked to anyone who would talk to me about trying to do it. I think even before that, have you ever been to Jamba Juice, by any chance? You know, like, the juice store?
Jonaed: I would say, yes.
Sheridan: Okay. This is….
Jonaed: That’s expensive, man. That’s more than Chipotle money.
Sheridan: No. It is. Okay, so, funny enough, funny enough. It was wildly expensive, but I love Jamba Juice. It was like crack to me. They used to have this thing. It's very nebulous and you can define this as a startup. It was really just me hustling and Jamba Juice, but essentially every time you made a purchase, they give you a receipt and, on the receipt, if you fill out a survey, essentially, it'll have a code. You go to their website, fill out a survey and if you fill out the survey, you'll get a Buy One, Get One Free on your next Jamba Juice. So, my whole thing is I would wait at Jamba Juice. Someone would make a purchase. I would be like, “Hey, is it cool if I get your receipt?” They’d be like, “All right. I guess, why not?”
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Then I would fill out the survey and then I would wait for the next person in line and be like, “Hey, I know you're buying a Jamba Juice. Is it cool if I just use this receipt for you because I have like a binder to get one free?” And that was my way of just getting myself a lot of Jamba Juice because I wanted Jamba Juice, which was just like trying to hustle on the side for a Jamba Juice.
Jonaed: What came next? Obviously, we all have those creative ideas or like, “Oh, I'm getting like a $6 smoothie.” What came next for you?
Sheridan: I did a lot of different stuff like that between the age of 11 to 15. I ended up graduating a little bit of like, I did some stuff on Moonscape, which was just an online game. I would sell gold. I would create a marketplace for it. Ended up having a bit of my foray, kind of being like a drug dealer when I was like 13, 15. But really, the first kind of serious startup I ended up working on was when I got into college. So, got into college at 15…
Jonaed: How did you get into college at 15? You must have been not only hustling, you are definitely hitting the books.
Sheridan: Yes. I had probably a somewhat different experience with school. For me, I didn't graduate kind of any grades when I was younger, if anything, I almost got held back when I was in 3rd grade because I was struggling to read and write. But for me, what ended up becoming kind of like a driving force behind school was that – I remember like it was yesterday. Math was the one subject that I was okay and I remember one year -- this was in 3rd or 4th grade -- I was sitting in class. There was this new kid who had come into our class. He had just skipped up like two grades, super, super smart guy. I remember he was reading a geometry book. So, I go up to my teacher. I'm like, “Hey, what's he learning?” My teacher just made this off-hand comment like, “Oh, don't worry about it. He's special. You'll get there eventually.” I don't know what it was about that comment, but it legitimately drove me insane. It's all I could think about. The fact that this teacher just thought this kid was fundamentally better than me just drove me nuts.
So, that day I literally went to the library and I just picked up every math textbook I could. I didn't have a plan. I literally went there and I picked up calculus, algebra trig, precalc and multi-variable calc and discrete mathematics. When I was in 3rd or 4th grade, I was just sitting there and I think the first book I tried teaching myself was calculus. I had no idea what I was looking at. I hadn't learned algebra yet and I was trying to do multivariable level calculus. For me, I was just so frustrated that this teacher just thought that this kid was so much better than me. So I, and this is probably not the best thing to do, but I literally take these books to class every single day. Half the time I had no idea what I was reading. I was literally looking at, you know, in the same way that I'm sure a lot of people look at multivariable calculus right now was the exact same response I had looking at multivariable calculus when I was in 4th grade. I did not know what I was reading. But to me, I was like, screw it. I'm going to have to force it into existence.
By the time I was in 5th grade, that was like a first time we kind of get in the middle school, start looking at your classes. And I kind of told my teacher, I was like, “I know I'm put in pre-algebra right now. But I know this. I've already taught myself this, can I just test out? By the grace of God, she was like the sweetest woman ever. She was like, “Yes, if you can pass this test, like the end of the year final we give, you can take algebra this year.” That was for me, what felt like the first big break I had, the first, real opportunity that I had to show to my teachers, like, no, I can get this stuff. I can figure it out. So, I ended up passing the tests, got into algebra. Then that summer, I can kind of just use this framework for everything I do preceding this. So, I ended up teaching myself geometry and algebra 2 trig. The following year, when I was in 7th grade, I came to the high school. So, now I was taking pre-calculus. And then from pre-calculus, by the time I was in 8th grade, I kind of did the same thing with similar subjects. I was like, “Hey, if I just teach myself this stuff over the summer after school, I can just skip all these classes. By the time I was in 8th grade, I was essentially full time at the high school. I was doing AP physics and calculus. For me, it was less so bored, like a natural passion of learning.
I definitely found the subject matter fascinating. But for me, I still always kind of felt like the underdog. I was always just so frustrated, but even when I tried to show this stuff, even coming into high school, I had all these detractors who were like, “This kid can't do it. You know, you're not able to move through classes like that.” And to me I also never got the concept of why you have this like 4yr structure to school anyways. I was like, “Why should I be in high school for four years? Why isn't it two years or one year or year and a half? Well, why isn't it a variable amount of time?” And I think when I asked my teachers about that, they never gave me an answer that I liked. They were like, “It's four years because it's four years.” And I was like, “Well, that seems like an arbitrary number. Why not just put me in high school for eight years? What's the difference at that point?”, So I think to me, those were the two big driving factors behind why I ended up kind of deciding to skip school and graduated early from high school.
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Jonaed: So now, what was your thing of going to college or how do you make that happen? I'm pretty sure -- did they even allow you to apply normally or do you have to make phone calls to be like, “I want to apply?”
Sheridan: Yes, Yes. For me, since I was essentially treated as a college graduate. I mean, not a college graduate, I was treated as a high school graduate because I legitimately graduated from high school. I kind of just applied and also, I should probably clarify. There's no way in hell I would be in the position I'm currently in if it wasn't for my dad. A lot of that learning was self-driven for sure. But my parents and my dad in particular, he was the one person through it all, fully believed me. I've legitimately never met anyone in the world who believes in me as much as my dad did. Back in 2nd, 3rd and 4th grade when I was legitimately not a well performing student, I was struggling in reading. I was really struggling with math. I even had a speech impediment while I was having trouble speaking. My dad just through and through it all, he's like, “Sheridan, not only can you be the smartest kid here and can you accomplish amazing things.” But if anything, it was almost like an expectation, which at first kind of materialized and we had a lot of fights. There was a lot of pushback all the time, but I think to me it was really important because it's like a lot of parents believe that their kids can do anything. But it was almost like my dad believes I should. It was fully within my ability, in my power to make it happen. If I did it make it happen, that was on me. I actually think that was incredibly impactful growing up, just because through it all, through all the faults, through all the [expletive] ups, through all the times in which I wasn't doing well at things, his conviction stayed steadfast. He was just that rock that made it so much easier to just feel confident that, you know what, why can't I graduate from high school at 15? Why can't I get into Harvard at 13? Why can't I do all these things by this age? These are all just like arbitrary constructs set by people who don't have good justifications behind the constructs.
Jonaed: Okay. Interesting. Now let's talk about more the – you obviously spent a lot of time on the books, but you also did a lot of things, right? You hustled, you did different things. What was the big thing that you did that the first big startup, more than Jamba Juice, more than Chipotle. This is like I could actually buy a PlayStation or something.
Sheridan: Yes. First week started for me, came in the form of sneakers. So essentially, I had a couple of buddies who were buying Yeezys, which are essentially these $200 shoes from Kanye, flipping it for like $1,000. I just thought that was fascinating. I was like, that's nuts. The fact that you can, you know, all they were really doing is they were waking up early in the morning, like nine, 10:00 AM, constantly refreshing the page, trying to buy the shoes. Then once it went live, they would check it out. I'm like, wow, holy crap. Like you're able to make $800 in an hour, which at the time was like, I don't make $800 in six months. That sounds like a cool opportunity. I think the one thing we walked to the table that like other players in the space were doing it is, there were already people who were putting together a box. It was something that had probably been around for five years and actually had some funds were kind of one of those things as well.
But my question was like, well, if you can do it with one pair and you know, if you've got thousands of these kids that are buying five of these pairs apiece, why can't you just buy 5,000 of these pairs? It sounds like all you really need to do is just scale up the infrastructure, get access to some of the money. And though I ended up being with a lot more complexity than what I initially thought, but that was the thesis. There was like, you can already do this at a small scale. You can make good returns at a small scale. Why not just do 100X that. So, starting at 15, 16, I actually raised my first quarter of a million dollars to be able to buy out these shoes before I saw it online.
Jonaed: How long did you run that?
Sheridan: Yes, that is actually still an operation. I think throughout the course of that, we've sold probably 10,000 shoes, 10-20,000 shoes. That business has gone through kind of massive ups and downs as well. There were times where it was like, “Holy shit, this is all the money I have in the world. I might lose money on this. Am I going to be like, not bankrupt, like heavily in debt?” You know? There was a lot of opportunities where it's like, oh wow, there's actually, you know, tickets, apparel. Kylie Jenner lip kits used to be a really big thing. There was all these kinds of different verticals we ended up going into.
Jonaed: So, your dad was a driving force, right? What were some other forces that really helped you?
Sheridan: My dad was a huge one, for sure. It's just like an incredible level of belief, incredible level of support that just through it all was always kind of instrumental. I think a big thing too was coming into college. There was this community called The Garage. It was like a startup incubator that existed at Northwestern. For me, I almost always kind of found solace there. When I was first coming into Northwestern, it was kind of hard to fit in, hang out and meet people as a 15 year old.
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While I'm someone who's relatively naturally extroverted, there were definitely a lot of times I was kind of down in the dumps or I feel like I didn’t want anyone to hang out with. To me, startups is almost when I always found myself, just like settling into when I felt uncomfortable. It was like one thing I always felt that I could control and could always work on and take my mind off of all the other stressors in the world, which I know is somewhat atypical because normally it's seen as like, you need to escape from the stress of startups. But to me that was like startups were my safe haven from the rest of the stresses. And yes, I think the community there was incredible. It was just like a lot of people working on a lot of interesting startups and a lot of interesting pathways. To me that was always kind of incredible to be able to chat with those people. Even the people I worked with in the sneaker business, a lot of the kids I was working with were my age, if not younger. People were like 14, 15, 16, 17, 18, who all from totally different parts of the world with a lot of whom I've never even met in person before. But we had worked together over this long period of time and they were kind of similar to me. Like they were always hustling, always looking for some kind of different deal or different thing to work on. For me that just kept me really busy. It just gave me something to do, which is really important,
Jonaed: You know, it's funny. I've resoled sneakers and two of my business partners have resoled sneakers. Obviously, we didn't do the 100X, right. But you know, it is a very interesting community and now it's like dominated by bots and all that stuff. It's almost near impossible to get it manually.
Sheridan: Yes.
Jonaed: It’s all right. You have to do what you have to do. I wish I met you through those communities. So, you went to school and you mentioned how it was being a 15 year old because I know it's like everybody is 18 and there are certain things that like, all right, we don't want to have the 15 year old around during our party, right?
Sheridan: Yes. I mean, it was meant like, for me, I'm the kind of person where it never threw me off, but that's just because I like environments like that, you know what I mean? Like I had gotten that experience already in high school. I started going to high school when I was in sixth grade and that was when I certainly hadn't grown yet. I was a lot less mature. I mean, granted, you know, by the time I got into college at 15, I was still 15, so I wasn't that mature. But certainly when I was 11, I was a lot less mature. So if anything, I almost already kind of went through those growing pains back when I was in high school.
To me, I kind of fell back on that same story of like, I don't get why everyone here is the same age. Like this doesn't make any sense to me. Like what I used to always tell people is like, look, I know kids who are 12, who are a hell of a lot [expletive] smarter than I am. And I know a lot of 30yr olds who I’m a lot smarter than. So, I don't understand why this is only a community of people who are like 18 to 22 because people progress at very different times. There was a lot of different ways in which people grow and to me, it doesn't conform to the same rigid structure that school [0:14:47] [Audio Glitch]
Jonaed: So, you’ve always sort of rejected structure. You've always rejected or the idea that everything has to be structured.
Sheridan: Yes. Yes. I think I'm someone who, and this is probably to a fault, but I'm someone who has a very natural inclination to just question things. Sometimes that can manifest itself in a good way of like now, working on these startups and industries that people wouldn't necessarily think of because I'm open to kind of just questioning things that people typically wouldn't. But that also has certainly manifested itself in a bad way of now it can be contrarian to a point where I'm just like disagreeable. I'm like constantly like, no, that doesn't make any sense. So I think, especially when I was younger, if anything, I've almost had to reel that back in a way because when I was 15, someone would tell me anything. I'll be like, “That's [expletive] bullshit. Like you don't know what you're talking about. Like prove it. Show me the data, show me the statistics. If you can't, okay, then [expletive] that.” If anything, as I kind of well, mature, I've tried to reel that back in a bit.
Jonaed: Okay. So, you obviously went to college, but you decided to drop out, right? Or not finish. What was the reasoning? And, you know, you also worked at Dropbox too.
Sheridan: Yes. You know, my kind of progression through college was starting on a single business that was going well. I was lucky enough to be in a position where we were actually kind of making money from that. I had done a bunch of startups in between. I was working on a private equity startup that gave non equity investors access to private equity funds. I was working on a tattoo marketplace where we built a marketplace for tattoo artists looking to get tattoos. And I think for me, I was kind of in a position where it's like, I'd kind of stopped going to classes back in sophomore year. Granted, I don't want to make that seem like it was just like -- some of it was just like laziness and not wanting to go to classes.
And then the other side was just like, it was hard for me to understand the benefit. I felt like a lot of the times I was going to these classes, I was hearing like regurgitated material through a lot of the lectures. For me, it probably just wasn't the best fit. I felt like the kind of people who I want to work with where I can come in and work with people during startups. I didn't necessarily find those people in the classes that I was working on. So yes, I ended up kind of leaving my senior year and that was to take on my company Slate Tattoo full time where we were building that marketplace for tattoo artists.
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Jonaed: How’s that going for you? Did it end up working out? What do you have to say about that?
Sheridan: That was probably one of the most fun companies I've ever worked on. As you can probably tell, I've worked on a lot of companies and a lot of [0:20:21] [Audio Glitch], I worked on building a company called FollowerStack, where we were building bots that would help people get more followers online. I think we did $50,000 to $100,000 sales and then it was just too hard to manage over time. So, I shut it down. And I think with Slate, which was the most recent startup I did to Lendtable. It was really kind of interesting. I think what ended up happening there was we've worked on it for about six months. We had gotten partnerships with two artists. We had probably done about like five, 600 tattoos to the platform. The biggest thing that kind of came to a head though is with my two co-founders. They both graduated at Kellogg Business School and we were in this tricky spot where I just couldn't really convince them to join it on full time.
So, we talked about it for the longest time. I think to me, that's when I realized just how important it is to have co-founders with just aligned views, because I didn't even necessarily blame them either. They were in very, very different parts of their lives. They had families, were moving to new places, were older, had expenses. And at first it was really hard for me to rationalize that. I was like, “God, it's a startup. Just go for it. Like, who cares if you have a job? You'll be fine. You know, we'll make it work.” So, yes, essentially, they both ended up kind of continuing on with their full time job after business school, which is why I ended up going to Dropbox where I was kind of a machine running them. I started there August 27th of my 20th birthday. The plan was just like, I'll meet a couple of cool people here. I'll be able to hire and find my co-founders in this tattoo business and I’ll go right back into it. It was actually funny the way I met my co-founder for this business was because I was talking with my manager at Dropbox.
I was like, “Yo. Let's do a startup together.“ But it's funny. Like you call on my co-founder for Slate and you can make it work. It'd be great. Then he ended up introducing me to Mitchell, who is my now co-founder for Lendtable. The guy was just by far and away, one of the best people I've ever met, like incredible background. He's worked on some really cool companies, but I think more importantly, he just genuinely cares so much about financial inclusion and accessibility. He grew up in Dayton, Ohio, in a low income black community and just being able to help serve the people in Dayton, Ohio, and his passion, towards legitimately trying to help those people was super inspiring. Incredibly lucky to have him as a team member,
Jonaed: What are some mistakes to avoid? Because, despite being 20, you have a lot, you've gone through a lot, right? You have the experience of some people who are like 40+. So, what are some mistakes you probably would have told people or you know, going forward, you're like, “Hey, I'm not going to do that again.”
Sheridan: I would say one would be, I never understood the benefit of relationships and companies before. I always thought networking was bullshit. There was no reason to do it. I think over time I've seen how it's like, just being part of communities that people who are working on startups and people to bounce ideas off of, are all super, super important. I'm like surrounding yourself with people who care about you and who you respect and admire is super, super helpful. Certainly when I was first starting, I came into it with such a -- like, “Hey, if you're not going to help me right now, [expletive] you. I'll make it happen.” You know what I mean?
I think over time I've tried to change that mentality and I think that's definitely helpful. I think for me, I almost say you can kind of knock down any door you want. Even when I was younger, I still had trepidation about like, can I hit up the CEO of this company? Will they take me seriously? And I think the biggest thing I realized over time after hearing no from a lot of people is like, that's the worst thing they can ever say to you. A lot of the times when you're starting businesses, especially if you're someone who's in high school, who's in college. You know, if you're someone who's privileged enough, will you take a little bit of a chance?
There's no reason not to. Worse case, you try a company, you gave it your [expletive] all. The company implodes. And now what? You don't have a company? That's exactly where you were six months ago when you didn't have a company. That's almost the biggest thing that I've kind of come around to. It's almost like, I feel there's so much less downside to what I'm working on. Especially when you're early on, I think that's actually a huge advantage. Before you graduate from school, before you have a family, before you have kids, you're actually in a position where you have nothing kind of holding you back.
Like you can mess up multiple times in a row, give it your absolute all and there's no real downside. If anything, you'll pick up all these skills along the way and be able to understand what you don't want to work on next, like what your best skill sets are. So yes, I'd say that was a big thing for me. Just like actually trying as many things as possibly can now and don't be worried about people saying no to you because that's fine.
Jonaed: Was there ever a time the lack of college degree sort of held you back?
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Sheridan: In my position? No, but I'm also cognizant of the fact that I was in a – you know, I interned at Goldman and JP Morgan. I also did always say, I didn't have a college degree. Like when asked, “Where did you go to school?” I'd say where I went to school. If you're inferring that I have a college degree, okay. I'm also cognizant of the fact that I was probably in a position of a lot more privileged than a lot of people who don't have college degrees have. So I could certainly see how it certainly could have served as a problem, especially when I was interning at JP Morgan and Goldman. If I didn't say that I was at Northwestern, there's almost a 0% chance I would have gotten any of those internships and I do think those internships were really helpful with both like legitimizing me when it comes to talking with investors, as well as --
Sometimes it's just nice to have a perspective shift. For me, startups certainly hasn't been like an all up and up. There's been a lot of bumps along the road. There's been a lot of times when I've hit a rut, don't have the motivation, don't have ideas for it to work on, aren't kind of passionate about what I'm doing, or have conviction in myself and things like that are kind of helpful to pick up skillsets.
Jonaed: Have you ever felt insecure about not having a degree?
Sheridan: Now? Not really because I think I can say like, “Oh, you know, I dropped out to do startups. I'm really young.” If anything, you can kind of -- You know, I make that part of my story. With that being said, let's just say this company fails and the next company that I work on fails, and I'm in a position where it's like, shit, I need to get a full time job. That could be a legitimate problem. I could have companies where it's like, “Hey, you kind of looked like you're a startup person. You kind of look like you just quit stuff. You don't even have a college degree. Why would we hire you?” Which I could understand. So I'd say, if I end up being in a position like that later on, which obviously I'm actively trying to avoid, it's something that I would certainly think about.
Jonaed: Okay. I think you'll be okay. You have enough experience and…
Sheridan: Hopefully. Hopefully.
Jonaed: Well, sneakers people still buying sneakers. So that’s the faith that you have. If you don’t mind me asking, how much does a product manager earn at a company like Dropbox? What are the ranges?
Sheridan: Yes, yes. I'm happy to tell you exactly what I was making there. I made $120,000 base with a $100,000 stock over four years and a $30,000 case signing bonus. So, my all end pay was like, $160,000 or 170,000.
Jonaed: Okay, that’s cool. You really reinvested a lot of the money, I assume.
Sheridan: Yeah. Actually, I was only at Dropbox for some context on that timeline. I started at Dropbox on August 27th, which was my 20th birthday and I quit in December or January. So, I was there for about four or five months.
Jonaed: Okay. Interesting. That was quick. When did you start Lendtable?
Sheridan: Yes, I started Lendtable back in January. The company is about four or five months old right now.
Jonaed: You left Dropbox because you are going to work on Lendtable or work on something else?
Sheridan: Yes. Yes. The plan when I came to Dropbox about two months in, love the people, love the culture. Everyone was super sweet. It was just clear that it wasn't necessarily the right fit for me. I kind of just had too much of that startup pitch that I had to scratch. So, about two, three months in, I was like, “Alright, I probably shouldn't leave this place and go back into startups.” The initial plan was to continue working on the company, Slate. Find a co-founder in San Francisco and then keep working on that. At the time I was just twirling around with this idea of damn, there's a lot of people at this company who don't use their 401(k) match and I didn't really get it.
I was like, this really seems like free money. Dropbox will just give you $6,000 if you put $6,000 in your 401(k). But I know five kids that I've already talked to here that aren't doing it. So then, when I met my co-founder Mitchell, we probably met back in November, December. We were just talking about the idea at lunch. We're like, “Why is this? Is there a way that we can solve this problem? Is there something that we're missing?” And then it kind of came to a point where it's like, “Nope, as far as we see it, this is just like a massive unserved opportunity. If you can serve this population, you can build a lot of wealth, which will really help them out. I think for me, what ended up being the catalyst to quitting is, my initial concern was actually like, ah, shit. Like, I don't want to jump into a company where I'm not really motivated to work on it. So, while I was at Dropbox , I was like, God, I'm just going to put in, you know, I'm going to go really hard with Dropbox. I'm going to do a good job. On top of that, I'm going to do as much work on Lendtable as I can. When it got to a point where I was doing like a hundred hours of work a week, and even still, I was like, damn, there's more stuff I could be doing for Lendtable. I was like, all right, it's clear. I'm just going to have to stop doing Dropbox because it was just clear that that's where my passion was and that's what I was interested in doing.
Jonaed: Let's go back sneakers industry. How has that industry changed over time? Because I remember when I was in high school, bots were like, did not agree. You actually have this wait this. Camp out, right? You have to wait and then you have to know what stores had them and there was a little bit. So, how has that industry changed over time? Because now the bots are so much more competitive than they were before, right? Now there are limits to the amount of bots you can buy. It's like the people are -- the kids are very amazing programmers.
[0:30:01]
Sheridan: Oh yes. Yes. I mean, it's fascinating what’s going on. Just like seeing how the industry has changed over time. You started with people not even recognizing that there was a sneaker industry, you know what I mean? Like you got a lot of these wealthy investors who look at it. They're like just what a bunch of street kids like the South side of Chicago, they're like, that's not a real thing. Now you've got companies like StockX and GOAT that are both billion dollar plus companies. And on top of that, you also see this massive kind of supporting wave of a lot of streetwear, even things like collectibles. Also just like a resurgence and just like the amount of people who are interested in it not only has the resale price of a lot of the stuff gone up, it’s also just so much more accessible. Whereas five years ago, a limited release might've meant a thousand pairs. Now a limited release could be a place like Nike or Adidas coming out with like 20 to 30,000 pairs.
So, it's just like the overall size of the market, the amount of people who are interested in has just skyrocketed. And I think a lot of that kind of came in tandem with Instagram and Twitter, where essentially the ability to share the outfits that you're wearing, the kind of clothes you’re interested in, being able to talk about all these releases and all these drops and what's hype has just exploded the amount of interest in the actual sneaker community as a whole.
Jonaed: Wow. I mean, I've seen it. It's just kind of crazy how the people make a lot of money. I've seen the resell price. On some sneakers you get, it's like gold, right?
Sheridan: Oh yes. Yes. Even the way that they opt, I mean brands like Supreme are fascinating too. Just because the way that they actually optimize the height for it is very, very, very calculated. This is a business where it seems like they're leaving all this money on the table, but the reason they do it is because it actually bolsters the rest of their brand. I think what makes it so fascinating is that there's no intrinsic value to a lot of these shoes. When Yeezy comes out with a new shoe, it's not functionally any better than any other preceding shoe. If anything, it’s less wearable. But it almost starts to derive its value from the fact that it's so limited and so sought after. And I think I don't want to speak on behalf of Nike or Adidas, but the way it really seems is that they're coming into it with like, we're actually gonna make it so the value of these items is the exclusivity which bolsters the rest of the brand.
Because now people are like, “Shit. If I don't buy this product right now, I'm not gonna be able to buy it. If I don't buy it right now, I'm gonna have to pay $500 in the aftermarket.” And for them, all they need to do is just a slight rechange on the [0:32:32] [Indiscernible] and the color or the type, or like the silhouette. Functionally it's the same thing, but they're able to just release so much more by actually limiting the supply, which is a fascinating concept that totally goes against supply and demand. Because you're not increasing demand by increasing the price and decreasing the actual supply of what you're offering. Just really interesting.
Jonaed: It’s very interesting because a lot of the money doesn't even go into Nike, because they are not capturing the resale value. But that essentially is a part of their marketing.
Sheridan: When I was pitching this company with people when I was younger, that was a big question. I was like, “Wait, why wouldn’t Nike want to just take all this value?” They don't. They actually want their shoes to resell for as much as possible because that's just publicity. Like when you talk about Nike off whites, they've probably released, I don't know, 50,000, 100,000 pairs across all of the off white lineup with Nike. But every single person who's into sneakers knows about them. It has generated so much hype, so much publicity. And at the end of the day, these are still shoes that they're selling for $200 that they're producing for $10. So, they're still making a lot of money, but more importantly, now, Nike is the super cool super hip brand that brings all of these, these clicks and all these websites visits that bolsters the rest of their massive product lineup that allows them to sell millions upon millions of pieces of inventory every year.
Jonaed: Yeah. I mean, it's very subtle because Nike definitely has -- they know. They know how much it's selling for. They know…
Sheridan: Yes. It's not like, they're like, “Oh my God. Whoa. This resole, we had no idea.” They have so much data and have so much information. They fully know that this stuff is going to resell, which is why they want it to resell.
Jonaed: Yes. So, now let's go back. You recently, I think you raised like $15 million for Lendtable.
Sheridan: Yes. For Lendtable, we recently did our seed round and then we've also raised kind of like a lot of debt and then got into YC.
Jonaed: Okay, nice. So, how did you go about raising that money? Because we're only in May. It's like January, November, you met your co-founder, and now all of a sudden you raised money. How did you go make that happen?
[0:34:46]
Sheridan: The first thing I'll say is that this is a wildly different space than Chicago. When I was thinking of coming out to San Francisco, I'm like, this is great because you're going to raise all this money. There's all these tech people and all these startups and it'll be like such a good environment. But I didn't really know what that meant until I came here. And when I came here, I was just blown away by so many -- it's almost like the way that they look at companies is so different. Whereas in Chicago or New York, or especially a lot of other States, there's a lot more value investors who are essentially looking for, like, what's your customer acquisition costs? What's your revenue? What's the unit economics of your business? How many users do you have today? Then second thing that they care about would be like, what's your team and maybe the third would be the long-term vision.
Whereas in San Francisco, you almost have that flipped on its head. Our experience was like, it's almost most relevant. Who is the team? Can they execute? Can they build something incredible? The second is like, what's the vision for what you're building? And then as a third, you find like, what are the unit economics of what you're operating on right now? And what are you building? But I think that was a really interesting shift for me because it was just a very different way of talking about the company. Because when we were first pitching it, the whole idea was like, let's talk about the unit economics. Let's talk about how much it costs for us to currently onboard a user.
Let's talk for all of these different metrics. What we actually found is that what investors were most receptive to is like a high level description of what we're doing. But more importantly, what is our path to getting to a multibillion dollar company as well as why are we the right team to build that thing? Which to me, it was a very different kind of perspective shift than the one I was expecting when I was started out here.
Jonaed: You have experience. The team is so important when choosing [0:36:31] [Audio Glitch], right? Because if you don't have that long-term vision, co-founder battles. I mean, yours wasn't too bad, right? Yours was just a disagreement, but some get pretty nasty.
Sheridan: Oh, for sure. Yes. I mean, you know, biggest thing that can ruin a company is co-founders falling apart, for sure.
Jonaed: You’ve obviously learned a lot. So, what are you currently focused on learning? What are you still learning about?
Sheridan: A lot of the learnings I'm picking up -- I wouldn't necessarily say I'm actively trying to pick up skills and maybe that's to a fault, but really what I'm focused on now is just like a lot of things that need to be done for the business. You know, I'm hiring for like real, full time employees for the first time. This is also different than the kind of businesses that I ran before. A lot of the businesses I ran before, like the sneaker business, that was never venture funded. The goal was to never be a billion dollar company. The goal was to make a couple million bucks. Cool. You know that that was the vision. And here it's about creating the foundation of building the product, onboarding these users and putting us in a position where in, you know, a year we have this much, so we can raise on this and we can build a much larger organization.
I think that's when one of the biggest things for me to get my head around is trying to understand. What does it actually mean to build one of these, like longitudinal businesses and having this very long-term vision for growth and execution. Also balancing that with what do we need to actively do day to day to keep the business afloat and kind of chugging along well?
Jonaed: What is like the dream? What is, you know, for this company or just even yourself? What's the dream like? This is when you know, hey, I've made it with this company. You've obviously got past the first hurdle in raising a lot of money. You've got into Y Combinator. What's the next big hurdle and what's the end goal?
Sheridan: Especially when it comes to this business, there's a lot, a lot we need to do. We're not even in the first inning right now. We're on the first minute of the game. It's all about just having those first 100 customers have a phenomenal experience, really to be able to help them. Those are obviously the immediate goals of what are we doing in the year. Like build a great product. Have a great plan. Have users who really, really understand the product and have it really actually helped them? Then I think for the long-term vision of what we're building here, really, to me, it just all comes back. When I was a kid, one of the biggest things I struggled with was kind of just like this lack of access to credit and liquidity. Building the sneaker business was hard because it required money. I very well could have made more money from investors if I just had access to it. But because they didn't understand what I was working on, because I didn't necessarily have the connections or live in the right community or the right people to be able to sell it, not only did that mean that I missed out on a lot of money, but also I would say, what is also detrimental to them is like the people who didn’t invest in me. Kind of the same thing, you know what I mean? Like there's all this value that was left on the table and I think that I'm an even lesser example of that case.
I think you've got all of these kids growing up in these disadvantaged backgrounds. So, they don't have access to the communities that don't have access to the networks. If they could just have some of that liquidity, some of that credit, they could actually build these massive companies, have access to these great opportunities, to be able to actually kind of push their selves and their families along. Not only is that great for them, but if you could make it so if I give you $5,000, you turn that $5,000 into $100,000, that's also value I can capture myself. You know what I mean? That's a level of wealth creation where it's like, I help make you money, which makes you a lot of money and also will help me make money.
[0:39:39]
So, I think like what we look as long-term vision, what we're doing with Lendtable is we want to be the first platform for providing wealth building cash advances. So, we're starting with 401(k) matches as a space because that's $24 billion that are left on the table every year. On average, that's people leaving $5,000 every single year that they're missing out on. So ,if we enable a kid who just graduated from school is making $60,000 a year in like Arkansas to get us 401(k) match of $5,000 and we continue to provide that value for him year over year, over year, he'll now have a million dollars in his 401(K) that he wouldn't have had before. I think with that, once you actually unlock that wealth, there’s all of these different, kind of like disparate avenues you can start going into. There's a broader space and employee benefits. There's like, “Hey, now you have this capital, how do you use it to look at your finances, to pay off student loans, to pay off your mortgage, to better understand the kind of investment properties that you can actually put in?” So, I think for us, that's kind of the long-term vision. It is to be the one central hub, essentially like a bank, but a bank where the only way in which we make money is by being able to actually create and build wealth for our users.
Jonaed: What advice would you have for people going forward? Especially, I think you could really impact a lot of young people. What advice would you have for someone who's like, you know, 10 to 15? What would you say to get started on whether it's the receipts or something like that?
Sheridan: I think for me, the best way to figure out is just to do it. There's a lot of advice you can get from a lot of people and that's all great. I think what's most important though is if you have an idea, even if it's a shitty idea, which it probably will be, I've gone through like 10 shitty ideas at this point. And who knows, maybe one of those shitty ideas, we'll get lucky and it'll work out, but just work on it. If you've got an idea for a product, draw up the product. Try to figure out how to build it. If you don't know how to build it, look at classes online to figure out how to do it. If you've got an idea for a store or a restaurant, learn and work with people who do it. I think the biggest thing is just like, if your concern is like, “Ah, I don't have this skillset or I'm not old enough.” You can just go for it. You know what I mean?
Like if you don't know how to code, you can teach yourself how to do that. So, yes, I would just say start as early as you can. Especially if it's something you're passionate about, why not go for it? There really is no downside. You know what I mean? I have a tremendous amount of respect for people who have tried doing startups for a handful of years, and it's never worked. Because at the very least they've gone for it. They've given their best effort, they’ve put in the time. Eventually, just by pure chance, you know, there's that statistic that it's only like 10 or 20% of startups work out. Well, if you do 30 startups, one of them is bound to work at one point. You know what I mean? You can almost just like throw a nut. I think that's almost an advantage of being young. Like when you're 15yrs old, you can do five failed startups in a row. You're 20 now. You know what I mean? You're fine. You can do anything. So, it's almost like the earlier you start, the quicker you start doing it, there's just no reason not to.
Jonaed: What was the shittiest idea you worked on?
Sheridan: I mean I don’t [0:43:02][Audio Glitch]. Can’t think of the shittiest idea. I've done.
Jonaed: I know because I've had ideas when I’m like 15 that sounds so great. And you look back, it's like, “Yeah. I don't know why I thought that.”
Sheridan: I had one that was a little insane. I never really did too much on it, but I thought it was pretty dope when I was thinking of it. I had this thought where it’s like, “Wouldn’t it be dope -- I think it was working out when I was like, “Yeah, I must be [expletive] young, probably like 14, 15, and I was like, “[expletive] Treadmills suck.” I don't want to be on a treadmill. But then I was like, “Oh, I need to go on a treadmill.” And I was like, “Damn, I wish there was something that just like made me go on a treadmill.” And I was like, “What if I just made a treadmill, like bolt your feet into the treadmill.” So you couldn't stop running. Where it's just like you had to. As you walked into the treadmill, you would just have to be on it for 10 minutes and there was no way to get off. It would just like force you to do it for 10 minutes.
I thought that was like the greatest idea. You know what? I take that back. That's still a good [expletive] idea. Someone should [0:44:06] [Audio Glitch]
Jonaed: It is definitely a cool idea.
Sheridan: A lot of variables that I wasn't thinking of, but I'm like, “That would just be great because this is something I want to do, but I just don't want to do it right now. I wish there was something that was just force me to do it. You know what I mean?
Jonaed: Yes, yes. So, what's your idea making process? It just seems like you have an idea and you kind of map it out.
Sheridan: Yes. It can come from -- a lot of it comes from just frustrations I've had, people I've talked with, people working on interesting ideas, interesting marketplaces. Like for the 401(k) business, I started off by being confused. I didn't get why my friends weren't using their 401(k) match that I got frustrated. I'm like, “Okay, I think I get why they don't use their 401(k) match, but that's a shitty reason. Like that kind of sucks.” These are people who like losing $6,000 for no reason. You know, I think for other businesses like the sneaker business, I knew a bunch of people who were into sneakers. Seemed like our problems, I had questions on how it works. Seemed like a cool way to make money. Jamba Juice thing. I wanted Jamba Juice. I was hungry. I was willing to do whatever it took to get Jamba Juice. So, yes, this is certainly not some novelty but I think if there's something that frustrates you or a problem that you see, try to come up with a solution.
[0:45:06]
Especially if you have ideas, someone's the kind of person where it's like, they can't think of any ideas, they don't have anything that they want to go towards, there's actually a lot of great publications that will just talk about all of these different spaces that have all of these different kinds of ideas. I think there's this one podcast, not podcast. It's like a newsletter where they essentially do like a billion dollar idea every week. Like, that's the whole thing. There's this one dude. He thinks of an idea for what a company could be. He writes out this page long description on what the market is, how you build the company, what it would be. And it's not like about like previous companies, it's about like what are new companies that should exist, that could be worth a billion dollars. So yes, I just kind of got it from any source of inspiration.
Jonaed: It seems like you read a lot. That's kind of always looking at what others are doing and kind of getting information.
Sheridan: Yes. You know, reading a lot -- I think a lot of it can just come from your own personal experiences. Like if you have any frustration about something you are dealing with right now, and you've thought of an idea of a solution, digging into that a little bit more. You know, a lot of the stuff that I've worked on before has come with frustrations or questions or confusion I’ve had around just like things that I've been dealing with my own life.
Jonaed: Okay. Cool. I just really want to thank you for your time, and as we wrap up, how would someone get in contact with you if they listened to this episode?
Sheridan: Yes. Yes. You're welcome to email me at sheridan@lendtable.com. So, that's L-E-N-D-T-A-B-L-E. Feel free to follow me on LinkedIn or Facebook or check us out@lendtable.com.
Jonaed: All right. So, thank you so much for your time. I know a lot of people will get inspired. I see wonderful things for your company, and we'll definitely keep in touch.
Sheridan: Cool. You’re the best. Thanks so much. Stay in touch.
Another great episode. Thank you for listening. Hopefully this information was valuable and you learned a lot. Stay tuned for the next episode. This show is sponsored by you. No Degree wants to remain free from influence so that we can talk about the topics without bias. If you think the show’s worth a dollar or two, please check out our Patreon page. Any amount is appreciated and will go towards making future episodes even better. Follow us on Instagram or Snapchat at No Degree podcast. On Facebook @facebook.com/NoDegreeInc. If you want to personally reach out to me, connect or follow me on LinkedIn at Jonaed Iqbal, spelled J-O-N-A-E-D, last name, I-Q-B-A-L. Until next time, no degree, no problem. Nodegree.com.
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[0:49:05] End of Audio