CK is a fantastic example of a company that did not take the fantasy straight-line path. I’ve gotten to chat with them about it a few times and always leave inspired. Some nuggets:

They started 13 years ago and got turned down by nearly every VC (not for lack of trying) until @davemcclure (then at Founders Fund) gave them a $500k check. IIRC they had 30k customers then and very little monetization.

A year later (2009), things were starting to look better and Felicis and QED ( @fintechjunkie) came in. The valuation for the $2.5m series A was laughably low by today’s standards.

By then things started to work. One of the things they discovered was that TV was actually a good source of customer acquisition! Google had a TV ads product at the time, and CK made a really cheap ad and set it to only buy ads when they were extremely cheap...

The way they discovered that it worked is awesome: an automatic email went out to celebrate every time they got more than 100!customers in an hour (called a Power Hour). This happened twice in a row at midnight and they weren’t sure why... turned out to be their cheap TV ads.

Ken says it was very lucky that they discovered TV but I think it was less luck and more their desire to try every channel- TV was a good one. It still is and I’m surprised that more tech startups don’t use it.

most OG fintech people know this but others don’t: this isn’t the first time that Intuit tried to acquire credit karma. IIRC Intuit was trying to acquire them for a low 3 digit million price before the series B, but CK didn’t take the deal and instead raised (at a lower price)

One really important thing that they always stressed was doing right by the customer. At the time there were scammy free credit report offers out there that ended up costing consumers a lot: remember these amazing ads?

CK used clean branding / messaging and a passion for making the right decision for customers to build trust that paid dividends and led to a lot of word of mouth