Angela Robertson 0:00

Welcome back to the Stormy Story Show. I am your host, Angela Robertson, CEO of Ace Tech. We are a community of tech founders and CEOs, ensuring that no tech founder or CEO has to grow their business alone. Today's guest is Daryl Hatton, CEO of Connection Point, the collaborative funding infrastructure behind platforms like Fundraiser, Coco Pay, and Crowdfunder. Under his leadership, these platforms have helped raise more than $400 million for over 200,000 projects while reimagining how communities fund causes, creators, and critical needs. Welcome, Daryl, to the Stormy Stories show.

Daryl Hatton 0:42

Yeah, so thanks for having me.

Angela Robertson 0:44

So grateful that you've come and joined us. I can't wait to hear more about your journey. You've built multiple funding platforms that blend technology with community support. What first made you believe collaborative finance could reshape traditional funding models?

Daryl Hatton 0:59

Well, when we got started, um, I was looking at this new phenomenon that was called Facebook. And I was coaching my lacrosse team. And one of the things that happened was um we were trying to raise money for the team. Along the way, I posted uh a practice on Facebook as an event, and all my guys showed up. It was the first time. If I emailed them, they never showed up. And I went, this is changing the way we communicate. I wonder if I could use this to raise money. And fundraiser was born. And so we started using it from that point of view. So the epiphany was really to scratch my own itch around something I had to do in my own life. But what I saw in that was the power of that connection, the ability to get a message out to a very broad audience about a need and make it really convenient for people to participate. And, you know, that's kind of history now.

Angela Robertson 1:51

That's a fairly big leap to make, though, from trying to organize a bunch of guys around a sport to fundraising. So how did you jump that chasm and decide that that could be something beneficial?

Daryl Hatton 2:04

Well, I'm a certain, you know, I'm a multi multi-time entrepreneur.

Angela Robertson 2:08

Yeah.

Daryl Hatton 2:08

And um, I was in my previous role, I was CTO and senior VP development of a software company we took public on NASDAQ in December of 99. And I guess part of that is I became an entrepreneur because I found myself unemployable. It was hard to actually work for others in that until I got into you know half a half decent leadership role, and then I was able to make it work for me. Part of the way the I think my brain works is to just make jumps like that and end up seeing a need. I wish I could find a better model for it or explain it. Other than it's really about trusting your intuition and your instinct sometimes, and go, I wonder if. And the other side of that is to be curious, just to say, I wonder, you know, don't immediately shut down an idea. It's kind of like internal brainstorming. Let it just run for a while. What happens if we did that? Well, maybe we could use that to raise a whole bunch of money. The scale of it was not known at the time. We did set out to change the world. I set out to fund my lacrosse team. And along the way, we you know raised a lot of money for a lot of projects and helped do some pretty interesting and packful things.

Angela Robertson 3:15

Incredible. I actually love that term of unemployable. One of our roundtables affectionately calls themselves the unemployables. So you're in good company with our community for sure. How have you learned or what have you learned about human behavior and generosity at scale? You've powered over $400 million, I think is what we said at the top of the podcast through Connection Point. You must have seen what that kind of impact can do. I'm so curious to know what how that's moved or changed your opinion of how the world can work and actually come together and be collaborative sometimes.

Daryl Hatton 3:55

Well, I think it's interesting you ask that because a lot of people don't think about it. And one of the things I believe, and this is one of the reasons it probably works, I believe that people want to be generous. I believe that they want to help. That a lot of the behaviors where we become selfish or whatever are driven by fear. They're driven by, you know, and the fear can be I'm not doing well enough. Therefore, I need to hoard what I have in order to get ahead. And I think we're biologically wired to help each other. And I did a TEDx talk on this, on philanthropy is entertainment. And the underlying concept there is that when we give, our bodies reward us with endorphin, serotonin, oxytocin, dopamine, the feel-good hormones. And it's done that way because working together as a community, helping each other is better for our long-term survival. It was when we were on the savannah hunting, and it is now in modern business. We've told ourselves a bit of a fib that we're the, you know, I'm a solo operator. I'm I'm just going to do it all myself. I don't need anyone. I think that that's um a fantasy. And so I believe fundamentally in the generosity of people. And so, how can we make that generosity, unlock that generosity? And a big part of that is effective storytelling, helping someone understand how they change the outcome of a situation through what might be a small action. And when we help them do that, they feel empowered and they want to do it again and again and again. It feels really good to give, as long as it feels like you're getting the result that you want.

Angela Robertson 5:31

Yeah, that resonates so much with me. And you can see it in, you know, people who find these causes that they're really passionate about, right? And how it starts to impact and infiltrate their day-to-day. And then even to the point that you were making around founders or CEOs who have that sort of thought that they need to do it all alone. And the truth is that it will they'll achieve better outcomes if they don't have that mentality, right? If they're leaning on the team around them, if they're, you know, leveraging each other to figure out what their blind spots are.

Daryl Hatton 6:03

Well, it it starts even, and this is one of the problems I had in the very beginning was recruiting enough people that really were good at what they do and being and wanting to help a struggling startup with not a lot of cash. Like, so that's a big storytelling thing. It's a sell job, right? You're basically saying, here's where I hope we're going. This is what I think we can do. How could you help make that better? Now, notice I didn't say, do you want, you know, like it's about how can you help make that better? Because I think in business, one of the things we've all got to figure out more is why we do what we do. We sometimes get into it for I need to take care of my basic shelter needs, you know, Maslow's hierarchy things. I need money to pay for my rent, pay for food. But there's the place where as we grow into that, we need to really get clear about why we do it. And that's what the a big change in a lot of businesses now are are focusing on the why. I mean, Simon Seneck did a whole talk on that, but before that, it was even why do you go to work every day? And what are you getting out of it? And what I find is when we're focusing on that, it's a lot easier to be generous to people around you because you're trying to create a shared experience, not just a singular experience.

Angela Robertson 7:16

And I think that especially in today's world where it feels like growth is outpacing us all the time, or that's all that people are focusing on, you can go down that path of I'm doing this in order to grow, in order to scale, et cetera, and do that at all costs. How have you balanced that mission, that underlying sort of thread of what the why with the commercial success across your companies? Because sometimes those may feel odds, like you're saying.

Daryl Hatton 7:47

They can. I think we are very lucky in that because we can align them so closely, it actually helps us the more we lean into what we do. You know, the joke of it a little bit is we give away what we do for free and we make money out of it and everybody's like, that just takes some thinking. But it is. We're not here to optimize the effectiveness for us. We're here to optimize the effectiveness for our customers. And a side effect of that is money flows to us. So the better we are, the more aligned we are at helping our customers achieve what they want out of this, the growth that they need, the better off we are. And that means that I mean, one of the things we do is we give away um lots of free help for doing what we do to the industry at large, not just to our customers. Because that generosity both attracts new people, but it also helps, you know, like I think it's just important right now. We need to take care of each other because the world's in a bit of a rough place. But, you know, so that alignment in the business makes it easier for folks to come to work every day. They're not sitting here going, I'm going, great, I'm gonna go write some code, or I'm gonna go and create some marketing material or anything like that. At the end of the day, we can celebrate the fact that we helped the kid get cancer treatment or we saved a puppy dog or we got a new water plant built somewhere, or we helped build all the the um art exhibits of Burning Man, you know, like little crazy things like that.

Angela Robertson 9:10

And surely, though, at the same time, you must have faced economic hardship through that time too. There's still difficult decisions you have to make as a business. So how do you still align those pieces, right? You know, if we can only imagine that the team is buoyed by the sense of the impact that they're doing, but there's still you know ups and downs in the day-to-day.

Daryl Hatton 9:29

It there is. There very much is. And uh, we had a couple of very hard times along the way. One of the things is that, you know, is and this is a bit of an aside, but we'll get around to it, is that uh, you know, as entrepreneurs, we want to we put our heart and soul into what we do. And the putting my heart into that actually caused a heart attack. I mean, it was a really, really I was overclocking, trying to be, trying to succeed in what I was doing. I hurt myself. And that really hurt the growth of a our growth as a company. So that created a lot of financial hardship. But I think because people were more bought into the mission than that, they were they were willing to put up with lean times to get through because we'll get it back. We'll keep going to where we're going. But in the, you know, they weren't immediately jumping ship. In fact, it was very rare to have somebody wanting to leave like that, even though it was financially harder for a while. So I I guess it I don't know that there's a really clear answer in there, besides it is um if if we're thinking about the best outcome for all concerned, we tend to get good outcomes. And it it can just be, you know, it gets you through tough times as well as good times. We started this company in the you know, 2008 um crash. Everybody was going, is this a really good time to start a company? The economy's tanking really badly. What's gonna go on? And I looked at it and went, This gives us an opportunity to move faster, to take, have a little bit of courage around what we do. We can get it disruptive to the industry. That's an opening for entrepreneurship.

Angela Robertson 11:07

Definitely. That disruptive behavior. It's really a And we're having that happen now. It's happening right now. Yeah, we're in that same epoch, right? That shift, absolutely. Just want to go back a little bit because I really appreciate the vulnerability that you shared. And what is something that you learned from that stretch of time where you were overinvesting yourself in the business? What is something that you've applied today, maybe that other entrepreneurs can learn from in if they are potentially getting themselves into a position where they might be hurting themselves and hurting the business without even really realizing it?

Daryl Hatton 11:43

So one of the kind of the bigger lessons that came out of that, that's still a hard lesson to keep learning all the time, was that I have trouble focusing. And there's ADHD, but it's it's more than that. It's just I want to do it all. If I'm solving a problem, I want to do it really, really well. And so that means the A list, the B list, and sometimes the C list. And what the heart attack showed was that my normal method for dealing with all of that was to just do more, to ramp up my energy, to tackle it harder. And as a result, it I got stretched way too thin. And I was trying to do everything all at once, and I wasn't doing very well. So one of the things that the heart attack forced me to do was I had to start to focus because I couldn't just do my default behavior anymore to ramp up my energy level. I'd get tired really, really fast. And um, you know, I I have to be cautious now because I don't get tired really, really fast. So not to fall into the old habit. Like I, you know, our our health system's wonderful. They did a fabulous job. Um, and I'm I'm in great shape from that point of view, but I don't want to um fall back into the habit. So one of the the challenges is to, you know, I I call it put on my CEO hat and quit playing with my company and actually do a couple of the things the CEO should do around focus and alignment and and and that kind of thing, and help say no to a bunch more things. And then you know that's such a crucial phrase. What are your what are you gonna say no to? Because there's the world is full of opportunities, but you spread yourself too thin if you say yes to everything.

Angela Robertson 13:21

Exactly. Yeah, we used to talk about it. It's kind of like the whole put your own oxygen mask on first before you help others, right? You've gotta be your own best self in your own best shape before you can really let others lean on you too. That's a really valuable lesson. That's something that I need to hear today again. I want to also go back to your business in particular. I mean, crowdfunding in general. You said you started this business back in 2008. It's evolved significantly over the years. What do you see in the next wave of fintech or community-powered commerce, or what is something that you are talking about with the folks in your business about where the industry is going next?

Daryl Hatton 14:08

I'm not sure the industry is going this spot, but I know that we are. And that one of the things is crowdfunding is a tool that helps fund an impactful project. But there's a lot of things about it that are challenging to apply it to certain types of problems. And for example, if you're funding healthcare, if you use fundraiser or go fund me and you run a campaign for personal health care, the money goes into the pocket of the patient. That leads the donor to ask some questions of are they really going to use it for their treatment? Are they really going to, is this going to work? Are they going to raise enough money that we're actually going to accomplish the goal? Remember back to what I said earlier about a donor. They're quite willing to give a lot if they know they're going to get the outcome they want. But if they don't know, and there's a lot of uncertainty around the way crowdfunding works for healthcare and for purchasing devices and dental care and veterinary care and all sorts of things. So we built Coco Pay, which is about changing the model from crowdfunding to crowd financing. And that's getting help from friends and family to purchase a product or service. And we built in the technology there to address those issues of do you get the result that you wanted or don't pay anything? Like it's kind of a money-back guarantee, but we don't actually charge anybody any money to make sure that you raise enough funds to get the result of the project. Do you make sure that the money can't be touched along the way? That it goes directly from a contributor to, say, a healthcare provider or a medical device provider or a dentist for the treatment that they're going to give to the patient. So we're using it to help pay for commerce. And that's why we call it collaborative commerce. People are working together to buy something for someone. And we see this a lot in things like in Canada, even in healthcare, with advanced genomics. If you have an advanced cancer, Health Canada will pay for a portion of it. Only and they'll pay for very advanced treatments, but only if they know specifically which version of the cancer you have. But they won't fund the tests to determine that. So there's groups that'll are in the one called CTOM, where you can get the advanced genomics testing. We have patients here in DC that have raised $25,000, $35,000 in 72 hours to get their advanced genomics test done. Because the money goes in, you get the tests, or nobody's charged anything. We use the all or nothing kind of funding model to make that happen. So it's a long answer, but basically we're trying to reshape the way we can work together to buy things for one member of our community. Because regular insurance just sucks off a lot of value in what we're doing. And many people right now don't have the extra resources to deal with the major health crisis, dental crisis, pet care crisis, that kind of thing. So they can get some help with friends and family and then eventually can pay it back. Either pay it back directly or pay it forward to somebody else, and we strengthen the community that way.

Angela Robertson 17:14

And it sounds like you're seeing opportunity for that kind of innovation in both on both sides of the border in Canada and the US. Where is that pathway going? I'm so curious because I do see that healthcare is this sector where we're constantly concerned about the lack of innovation or the lack of pathways for procurement for innovative products and services in healthcare. So then it kind of behooves the community to come up with these solutions to circumvent the pathways. But I think it's a very frustrating market to be in. So what is it that you what is the kind of message that you approached kind of these healthcare professionals or the community in terms of how you're going to make that impact real?

Daryl Hatton 18:01

Yeah, it it you keyed onto something there. It's a very, very hard sales environment to get innovative products out into there. It takes very long time. There's lots of trust, partly because these poor folks are bombarded with people saying, I've got the next best way to do whatever. And they may not have worked it out completely in a clinical setting, and they may not have worked it out with the technology. And there could be all sorts of issues with regulators and all sorts of challenges there. And we've certainly found that. I mean, even just the idea of helping somebody pay for something has been, it's taken us a while to find the path through into the organizations where they go, This is a good idea. Like this is a no-brainer. We need to go do this, and then struggle for nine months to actually go implement something, which was a no-brainer to start. I'm not sure that we've got the magic bullet yet, but one of the things I know here is a key word in all this is you have to be relentless. And if an entrepreneur wants to succeed in a in a health market, they have to plan for taking way longer than you want, you know, so fund it appropriately, and then um be creative about how you approach it. One of the things that was happening with us in using uh crowd financing is that we were kind of competing with ourselves, with fundraiser, and with GoFundMe and others, because that's where who a lot of people do healthcare funding with. And we had someone very wise to us say, pick your competitor better. The competitor you're going after is hard to win against, not because it like they're better at it, they're significantly worse at it, but because people just have this mental image of who they are and it positions you when you get there. So we changed to looking at at alternative finance companies as the competition for what we do, the care credits of the world and the lending companies that will charge you 16 to 25% interest or 30 credit card interest rates to help buy your medical or dental treatment. And we're way less expensive than that and way easier to get it done. And and we can work together with those guys. So all of a sudden, by choosing different competition, we have a much easier story to tell. And it's resonating more with the people that we're working with.

Angela Robertson 20:20

Also, probably getting you to the people who are looking for what you offer better, right? Because sometimes, you know, people don't know an option exists if it's not presented to them at the right time that they're making the decision, right? So in that sense, you know, people may only think that they have these alternative financing options as the way to pay, right? But if they know that it's them or you, all of a sudden that's a completely different conversation.

Daryl Hatton 20:47

Well, and there are some economics, one of the things that started to happen is our giving market is really suffering under the uh economic headwinds that are going on right now. There's a component of the of the uh economy that's doing incredibly well. And there's like the lower two-thirds can't afford groceries, and this gas thing is just really, really hurting them. So one of the things that's happening is that the the alternative credit uh forms are tightening up. People aren't lending as much money or we're more constrained in the way they're lending. So our customers, the clinics and the dentists and the veterinarians, are looking at this, going, How am I going to help get more patients when they can't get funded anymore? Because they're losing a large number of patients. They say, Hey, you need this treatment. And the patient goes, I can't afford it. I'm done. So how can they help do that? And if the credit is tightening, they need an alternative. So we've actually turned the headwind that was hurting us in our giving market into a tailwind that's helping us in a crowd financing market.

Angela Robertson 21:46

That's incredible.

Daryl Hatton 21:47

And I think for a lot of entrepreneurs, you need to look at every, you know, they say every problem is an opportunity. This is an opportunity here.

Angela Robertson 21:54

Yeah, and kind of having that creative mindset to be willing to go, okay, maybe kind of follow. Following on where we started, right? Like what if we did this a bit differently, right? We're and seeing where that goes.

Daryl Hatton 22:05

Well, and that's where the courage to fail, I think, has got to come in. We the when we got started, there was this whole mentor of fail fast. And fail fast was really interesting when you had this massive green field of SaaS businesses that were going in. Just pick a different topic and you know, do X for Y, and all of a sudden you're gonna make a lot of money. That's great, but you didn't actually solve many problems. All you did was you took skimmed for a while. And when it gets harder, how are you gonna deal with that? And that's um, it takes more than fail fast. So you have to be willing to make some mistakes that are not potential, not recoverable, but also, and it's just not that you're gonna toss everything you've done and go just go do something else because it's easier. Uh in my book, I'm I'm stubborn that way. I want to actually solve this problem and not just go make a bunch of money. Um, I want to make a bunch of money while solving this problem. So let don't don't confuse the idea that it's not about running it as a business. But it is the net result is that back to what I said earlier. When we solve the problem for our customers, money is a side effect of that. And when we solve it for a whole bunch more customers, that's a lot more money. So I'm quite happy to solve it for as many customers as I can and and put the effort into that. May seem, I don't know. Some people look at me a little strange and go, you know, you're bordering on uh not a capitalist. And it's like, yeah, that's probably an accurate label.

Angela Robertson 23:31

But I think that's so refreshing, honestly, in today's market, especially when everyone is so worried, pockets are tightening, not just in terms of, you know, day-to-day expenses, but even on the funding side of things, you know, not just fundraising, but funding. And for companies, entrepreneurs who are looking for funding, they are constantly, I'm amazed by how much time they're spending on these pitch decks and going out and looking for funding. When just what you said, if you can solve this problem for people and it's painful enough that they will pay you, don't you think that you can go down that pathway of solving that problem? And now, like you said, the revenue that comes in is the side benefit. Isn't that the mindset for entrepreneurs to be able to win long term?

Daryl Hatton 24:18

There's a whole group that drives the entrepreneurial industry because they need deals to invest in. So there's a whole mindset around what do you need to do to be a successful entrepreneur? Now, maybe this is a little bit because I I've struggled to fund what we do. We now have uh VCs and some big angels involved in what we do, but it took a long time to get to the point where we could get that type of funding. And if I had spent as much energy on going after driving the business as I did in trying to go get funding, I would be in probably better shape right now. That doesn't work for all businesses. Some businesses need a lot of capital in order to get somewhere, but I think we also get into this idea that that is the only path to that. And sometimes the adversity of not getting funded can force you to solve the problem in a more creative way. And then now you own more of the you own more of the solution. And now you can get better funding for next month, next round, that kind of thing.

Angela Robertson 25:14

Yeah, I think that's such an important perspective. Daryl, anything else that we didn't cover today that you want to share to our listeners about your journey? Do you know why I'm an Ace Tech alumni? I suspected, but I couldn't be sure. So you have been a part of Ace Tech before. What did Ace Tech provide for you and your journey?

Daryl Hatton 25:34

Well, it I think one of the key things that really helped when we were first getting going was trying, we were trying to figure out what segment of the market we were in. So back to the question of focus. A lot of people were saying you can't do a broad-based platform. You know, so our fundraiser is very much like GoFundMe. You can fund all sorts of different kinds of things on it. And they said you can't do that. It doesn't work very well. And they were both right and wrong. We were looking for how to niche to win. And we went down a couple of roads that weren't very helpful along the way. But the A-step process of trying to figure out what the, you know, the the go-to-market on a lot of that, what the value proposition was that we were working was really helpful for seeing that we were going in the wrong direction. So like that's one of the things of about being taking honest feedback and and kind of re-evaluating, not giving up quickly sometimes. We switched focus. So it was more like pivoting and going, test this, test this, test this. Oh, we're getting resonance here. Let's try a little bit more of that, go deeper into that. And that was something that I I feel like I um got out of my early days at East Tech.

Angela Robertson 26:42

That's amazing. Well, thank you, Daryl. I'm really grateful for this conversation today. I'm so excited for this next chapter with Connection Point and Coco Pay. I'll be in the wings cheering you on and uh look forward to catching up again soon.

Daryl Hatton 26:58

And thanks for having me. This is always a fun conversation.