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Growing A Complex Product with Qube Money’s Ryan Clark

May 30, 2020

Digital Cash Envelope Budgeting

Ryan Clark is the Founder and CEO of Qube.

Qube makes budgeting easy. Qube is a mobile banking app that automatically splits your money into separate digital accounts, creating purpose behind every dollar. The app automatically keeps track of exactly what, when, and where you spent. No more trying to remember what goes where—it’s already organized in your qubes.

Learn more about how Qube can help your budget by listening to this episode of The Thoughtful Entrepreneur above and don’t forget to subscribe on   Apple Podcasts – Stitcher – Spotify –Google Play –Castbox – TuneIn – RSS.

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0:00
Welcome to The Thoughtful Entrepreneur Show. I'm Josh Elledge, Founder and CEO of UpMyInfluence.com. We turn entrepreneurs into media celebrities, grow their authority, and help them build partnerships with top influencers. We believe that every person has a unique message that can positively impact the world. stick around to the end of the show, we're all reveal how you can be our next guest on one of the fastest growing daily inspiration podcasts on the planet in 15 to 20 minutes. Let's go.

Right in with us right now. We've got Ryan Clark. Ryan, you are the founder and CEO of Qube Money. Let me spell that because it's one of those funky, you know, Spelling's that if you're a cool company you got and that's Q U B E and you're on the web at Qubemoney.io. That's Q U B E money.io. Ryan, thank you so much for joining us.

1:00
Pleasure to be here. Josh, I'm excited. It's good to see you again and and be here on your show.

1:04
So, Ryan cute money came about because the cash envelope system works. But there's a problem and that is that people don't really use cash. In fact, I was just listening to a, it had to have been a Freakonomics or one of those where they talked about how I mean we're big slow. No, no, it was stuff they don't want you to know. And they were talking about how we're becoming a cashless society, particularly if you're young, particularly if you're kind of on an upward You know, you're tech savvy, and you're maybe on an upward trajectory in terms of income. You don't use a lot of cash. I mean, it's kind of a last resort, like we're only when you absolutely, positively have to. And so, as a result of that, if you can't use a tried and true system, and if anyone is familiar with Dave Ramsey's cash envelope system? Listen, it works, it works because it's you're kind of forced to abide with what you agreed to do at the beginning of the month. And you would think that there would be technology that will have evolved to adopt this system. But sadly, we don't really have that. We have a lot of post mortem budget tools, but really until cube has come along, there has not been the digital version of that. So well, I kind of explained what you guys do, but I'll let you take it from there.

2:35
You know, yeah, Josh? Absolutely. The cash envelope budgeting method is the best system ever. And for the last hundred years, people have used it to change spending behavior. There's plenty of system just like you said, there's plenty of systems that will help you track what you did. But unfortunately, those are all in the past and the past has a hard time influencing you in the moment of a purchase. And so they fail over and over and over again. And it's interesting. So my background is in financial planning and coaching. And the Genesis story of how cube money came to be, is that I was working with a couple that was making about a quarter million a year. Now you would think with a quarter million $250,000 a year that should solve all your financial problems. But no, this couple after making that kind of income for 10 years, had a whopping $30,000 to their name. Now, they had the nicest cars and a garage full of toys and the best seats at all the events. They did plenty of playing and spending, but really didn't have anything to show for it. I remember talking with the husband, while he was stuck in traffic, he called me and said, Ryan, and he was being really honest, because the situation gotten pretty intense. And he said Ryan, I can't have the next 10 years be like the last 10 now as a as a planner and coach, I'm always looking for that motivation is someone really serious. And when we have someone who's serious, motivated, I'm always Really excited because I love I kind of lived to see that change and what we can do with it with a couple over time. So I started working with this couple. And we we went through everything. But when we got to the budget, this was a, this was a tough one. And I knew this couple would need some sort of a tool. So I put them on the best tool that it was brand new at the time was really exciting of a lot of great budgeting, little tools and tricks inside their app. And for a while everything was great. But as it goes with dieting and everything else, right? Human Nature kicks in, and we default back to whatever is easiest. That system, despite all of its cool tools and charts and graphs and everything. It still wasn't the bank, right? It's would say a limit of $500 in groceries over here, but they knew they had thousands in the bank, right? And so after about three or four months, they fell off the plan. That was frustrating and it got worse. When about a year later, they actually divorced mostly over financial stresses. Yeah, quarter million a year doesn't solve your problems. So This was this was significant to me, you know, my own parents divorced largely over financial problems. So it's a real hit home for me. I went to a friend of mine. And I said, Is there a way to design is a developer friend and he works in the payment processing spend space. So I talked to him that is there a way to design a system that would operate just like cash, envelopes, cash envelopes is unique, because it's the only system out there even today, the only system that is both the bank and the budget, and that's why it's one reason why it's so powerful. But it's not powerful because of envelopes. It's not powerful because of cash, although some people would argue that it's the cash factor. I don't think the payment method actually makes any difference at all my belief, and this is what we have experienced with cube is that the power of that system comes in that it is the only system that gets in front of the purchase. Think about it. As a user of that system, if you want to spend, you have to answer two questions before Each purchase, you have to answer which envelope is the money coming from and Do I have enough? Now you do these in milliseconds, right, you'll open your wallet or your purse, you'll find where you're gonna spend from, you'll make sure you have enough, you grab the money and sign the pay. And it happens pretty quick. And you have to deal with coins and change and everything. But that's a side note. But then, but so with Q, what we've done is we strive to maintain that exact same behavior. So with Q, we give you a debit card and an app. And just like cash envelopes before you can spend, you have to use the app. We do this by making the balance on the debit card at zero. So if you just swipe it, it'll fail have to go to the app, you have to answer those same two questions. Where's the money coming from? And do I have enough you tap on the envelope or the cube that you're going to spend from that money loads up onto the card and now you can spend what's available in that queue? you swipe, it does the tracking. There's no change to deal with afterwards. It's just tap swipe Go, your budgeting was done when you got paid and you created purpose or gave every dollar a job. When you got paid not when you're in the store, it's the wrong time to budget. Yeah. So that's, that's basically we've, we've done a little bit of a Genesis story there.

7:15
Yeah. So I mean, Ryan it. And again, the reason why this works, it's like, you know, the reason, you know, having recently lost a bunch of weight, I can tell you that, you know, any, just about any diet is going to work. And I think that where most of us when it doesn't work, it's when we cheat a little bit here and there. I don't think that it really matters, right? If we go well, I know I said $500 for groceries, but yeah, we'll do 620 you can do that. But the problem is now you're outside your budget, and now you know that hundred extra hundred and $20 that you needed to pay off credit card debt. You don't have that and it's because You've made it too easy to deviate from the plan. And so, Ryan, do you get much resistance from people who say, like, I want the results, but I don't want to have to? I don't know. It's like, it's like, Listen, are you serious about getting out of debt? Are you serious about getting, you know, saving for retirement? Are you serious about this? Or are you not? If you're serious about it, then we need to set up the system so that you can't fail. And, you know, again, when we force ourselves to say, Listen, I committed to $500. And now someone can still say, like, if they're like, okay, it's Listen, it's gonna be an extra $40 this month. I mean, they can manually override it, right?

8:47
Absolutely. Yeah, I think I think one of the key areas or key things that we have to remember with good budgeting is that budgets do have to flex. So there is going to be that, that give and take in each in each of your different envelopes. You have to Have a flexible budget or if it's too rigid, it just breaks anyway. So you know even inside cube and and with cash envelopes you can take from one another or you can take from the other envelopes to complete what you need for the other but what what the system requires a person to do at that point is to reevaluate their priorities. And that's what often does not happen when the money's not real. Like when it's just in a budget and money's really not really there's numbers on a page, right? Because the real money is over in the bank. So you can just use the personal think, Oh, it's $500 I need to spend 640, okay. And they'll just blow it and their their thinking process will stop there. With cube and with cash envelopes, you actually have to go Okay, where am I going to pull the money from? Is it coming out of our vacation envelope? Is it coming out of my clothing envelope, where's the money coming from? And they have to now evaluate their priorities what is more important to me, or maybe I'm not going to take from date night envelope because I know that she's planning on something this weekend. right oh, maybe I don't want to take from clothing because these shoes that I really wanted are on sale and I know I'm gonna go buy those, right. So very quickly someone can evaluate their priorities. Now, it's actually a little tricky with cash envelopes, because you may have to sit there and count dollars, because it doesn't automatically tell you how much is in each envelope. Whereas with cube you can just see right there. Here's how much I have designed right on the screen. But I think Josh, another thing that's really key. And this is where I'll argue with most people on on budgeting. I think that for a lot of people, it's not their fault that they can't stick to a budget. I mean, think about this. If your fridge was filled with junk food and fast food and microwave meals and that kind of thing. How would you eat even if you want to go and get on a great diet, you're still going to eat that garbage because that's what's easy. That's what's in the fridge. What would happen if the fridge now was filled with compartmentalised organized good healthy meals, fruits, vegetables, and that's what was in fridge, how would you eat? So one of our arguments is that part of why we have 70% of Americans unable to handle a $500 unexpected expense. And 70% of America is right there. Part of that reason is because the environment of money, just how it works is that it's that fridge filled with junk food. It doesn't support any sort of good financial health, or any system.

11:28
So Ryan, so this is a business podcast, by the way. And so I know we've kind of geeked out on budgeting, which you know, my savings Angel persona, definitely have an interest in that topic. But how does one launch a product like this?

11:44
Okay, cool. Yeah, so changing gears to the CEO mode. So it's interesting, and actually, I think it comes back to the same thing. I was reading an article just just this morning, and they were talking about how do you build a brand? How do you market and this this was confirming some stuff that I heard just last week, and we were up at Silicon slopes here in Utah, phenomenal convention. And they were talking about building that brand. And it came back to purpose. So yeah, we're geeking out here on what makes the system unique. We're talking about the details of why people fail in budgeting. But you know, it's those messages that that will build up a brand. So that the thing that we're doing is we're spending a lot of our energy really talking about our story. So it's the same kind of conversations, actually, what is cube money all about? How are we different from all the other budgeting apps, all the other online banking apps? How are we different? And we believe that that by focusing on that story, and I'll say that as we have focused on that story, as we have told people, the story, that's when we get the biggest buy in from people in the greatest belief. My story and trying to build this has been pretty significant as a CEO. I've been working on this for three years. Yeah, and You know, we've had some significant struggles, finding the right partners. So there's a story in there about partnerships. Now we have two dependencies that are unique from a lot of businesses, we depend on a payment processor, you have to actually process the money and then there's a bank that we have to interface with and those two have to be completely aligned then for us they've got to be pretty cutting edge because our system requires a very high degree of precision that most processing systems if you can imagine they don't have it. So So this will actually be the fourth time that I've hooked this up to a processor. Hmm. And you know the story about two years ago and 17 this is about when you and I met Josh. I was building this thing. And it was going great. The marketing behind it was looking good and we got into our launch month it was it was January 2017. And we're going market is going great and on a weekend and we had 200 people download and To sign up for our program, 200 people, I got a phone call from the from one of our partners from processing partner saying, Hey, we're being shut down now. We won't be able to send your cards out anymore. I got to get on a plane by who that was about how it was. And I spent the next hour staring at the ceiling, trying to figure out what on earth are we going to do? Yeah, we had one month left of money. Our runway was that tight. And so what do you do? It's all you CEOs out there. What do you do? The reason this is here today, and the reason why we were able to make it through that is honestly was was because of some grit i think but mostly because of the inspiration of how successful the system was from people. And I think that's something for anyone who's listening, you know, if you haven't validated that your system really does what it's supposed to do and hasn't helped people the way that you believe your system can You know, if you if that value is not there, your product really isn't amazing. If you've spent the time to figure that out, then when the times get tough, it's really easy just to say, yeah, I'm out. Yeah.

15:11
So, um, so you get ready to do the launch. You know, you've got a, you've got a small but but dedicated community, people who really believe in the product. What do you do at that point?

15:26
So, in my case, yeah, that so that partner, they were our first partner, they they did get shut down. Do not nest. It wasn't necessary, their own fault. But you know, they were an $8 million company. We've been around for eight years, we thought that everything would be just fine. But the value associated with shut them down, shut down their card program and we were with them. So we spent the next three months scrambling And fortunately, there was a CEO of a gift card program here in Utah, that liked our program a lot. And he just he said, Hey, come over here. I'll help you guys out. You can hook up for Free, and we'll get your card going. And I knew the tech wasn't there completely, but I didn't have any other options. So we set it up. And it was it allowed me to run the program for about three months, I'm pretty long, but run the program and get all the validation I could possibly get. So I tracked everything, and I did it alone. And it was me and my friend as our CTO, but we both had to go, you know, make money elsewhere. So this is this is our side gig at that point. We're trying to get this thing off the ground and just collect enough data. So yeah, we did that ran the program got sufficient data, then we pulled it down. And we started raising money again, because we had the data that showed that this thing works. It's helping people dramatically. It's better than what's out there. And so it took us another year or so to raise money again. And then we launched again, to another processor. And that was the one I was telling you about that. They're also they thought they had the tech but in the end they really didn't but that gave us about eight, eight or nine months of amazing data, where we were able to fully run the program and scale a little bit more. And we got up to about 11,000 users and and had some really excellent numbers that again, that's what allowed me to go back to the processor where I really wanted to be and say, Hey, this works. But yeah, so small, small community grew lots of great testimonials. They showing they just loved it that we really were onto something. And that's what ultimately fueled us and now today, we've got the most amazing team here in the office putting this together. We've got all the dream partners, we just we've just brought on a few other huge names that I can't quite mention yet but they're there. Everyone that we have ever hoped to work with has now joined on and we're looking to a successful relaunch or launch of cube relaunch Proactiv this spring

17:57
and so in terms of Kind of awareness and kind of growing cube, where's your focus?

18:06
So my focus is more strategic. Like I said, we've got a great team. And here's a CEO less than I, you know, this has been my baby for so long. I brought on these new these new people that were being attracted to us. And some of the marks are very well skilled. And I honestly had a hard time, I've had a hard time letting go of everything and to trust them that they would take care of my baby. And in doing so, it's created some strain, it's also created some growth. And so I'd say to other other founders out there, you know, attract great people and let them let them do their jobs. Don't be afraid to let go trust your team, so that you can become a leader and not the Dewar. And I was, for a long time I've been I was trying to be the Dewar like I had done in pushing this thing along. But yeah, so now we've got a phenomenal team here in office. We've got all the partners ships that we've dreamt of having forever. And so I'm I'm mostly focused on strategic and working on our patents we've, as we've gone along, we've been able to develop a bunch of unique methods to solve these problems that we think are going to be really powerful as we released our product. So we're patenting those, as well as other strategic partnerships, but overall leading and guiding the vision of the company. That's where I spend most of my time now.

19:29
Excellent. Excellent. So now, um, you know, in terms of partnerships, what you refer to partnerships, who are you referring to influencers, other brands, with communities of people that might be interested in this? Who else?

19:43
Yeah, so there's, there's marketing verticals, and there's partnerships we're doing there for sure. And a lot of those are influencers. We found a good solid niche with churches, and there's a lot of churches that support Financial Peace University, but no one has a good implementation tool. in this market, right, everyone can talk the talk, but it's hard to walk the walk when the system like I was saying earlier, the environment is void of any sort of philosophy. So yeah, so we've marketing verticals, but specific most most of what I'm saying with partnerships, I'm talking about the back end partnerships that we have to have a lot of businesses they can just develop a product and release it for us. We have to have a processor, a bank, there's no your customer rules. And so we have a partner in on that to help us do that more effectively. There is who's printing our card and how you set up the actual physical card. There's, there's a lot of components in there and so selecting that now, that team and those partnerships is really critical.

20:44
Awesome. Any any any conversations with the Ramsey, folks?

20:49
You know, it's interesting, we were, I was talking with a bank in Florida, and my, my core contact there was later pulled into Ramsey so he's now he works over there. Now. And he reached out out after he'd been there maybe a month or so and said, Hey, would you be interested in talking? And so we have had that come up. But you know, Dave has his system everywhere. And it's great. It does what it does. And we will, we'll do. We're going to do digital cash envelopes, which is what every dollar does

21:20
now now. Right, right. Well, Ryan Clark, he are the founder and CEO of Qube Money. You're on the web at Qubemoney.io. Again, that's Q U B E money.io. Ryan, thank you so much for joining us. Thank you, Josh. Pleasure to be here.

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